FxWirePro: AUD/JPY set to extend cloud breakout, eyes 200W MA at 79.42

AUD/JPY chart - Trading View 

Technical Analysis: Bias Bullish

- Closes above cloud on Monday's trade and pullbacks on the dat finds strong support at cloud

- Oscillators are bullish and RSI is above 60 mark, shows strength in the current uptrend. 

- GMMA shows minor trend is strongly bullish, while major trend remains neutral

- Bullish RSI divergence on the daily charts raises scope for upside.

- Price action is above major moving averages and volatility is rising which could fuel further gains

Support levels - 76.21 (Cloud top), 75.73 (5-DMA), 75.22 (55-EMA), 

Resistance levels - 77.80 (Upper W BB), 78.67 (61.8% Fib), 79.42 (200W MA)

Data Watch: China inflation data came in below forecasts which raises doubts on the nation's economic recovery. China Producer Price Inflation or factory-gate prices fell by 2.1% year-on-year in October versus an expected drop of 2%. The Consumer Price Index declined by 0.3% month-no-month, missing the expectation for a 0.2% rise and bringing the annualized growth to 0.5% from September's 0.8%.

Summary: AUD/JPY is extending gains for the second straight week after pullback has bounced off 50W MA support. Risk-on environment on the back of breakthrough in the  coronavirus vaccine keep the pair supported. Technical analysis also points to further gains. Scope for test of 200W MA at 79.42. Failure to hold above cloud will negate bullish bias.