FxWirePro: AUD/JPY breaks 50-DMA support at 87.87, bias lower, stay short

• AUD/JPY breaks below strong support at 87.87 which is converged 50-DMA and trendline.
   
• The pair is consolidating previous session's slump, trades a narrow range with day's high at 87.65 and low at 87.41.
   
• Bears now target 100-DMA at 87.17. Violation there could see further downside.
   
• Weak inflation data which dented RBA rate hike expectations likely to keep Aussie under pressure.
   
• Technical studies have turned bearish. Stochs have rolled over from overbought levels. RSI has turned lower and slipped below 50 levels. 

Support levels - 87.17 (100-DMA), 86.93 (38.2% Fib), 86.55 (Sept 6 low)

Resistance levels - 87.88 (converged trendline & 50-DMA), 88.07 (20-DMA), 88.22 (23.6% Fib retrace of 81.48 to 90.30 rise), 89.07 (Oct 23 high)

Call update: We had advised a short on the pair (http://www.econotimes.com/FxWirePro-AUD-JPY-struggles-at-50-DMA-8787-break-below-to-accentuate-weakness-969248).

Recommendation: Bias lower, stay short.

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -62.2173 (Neutral), while Hourly JPY Spot Index was at 28.3759 (Neutral) at 0630 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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