AUD/JPY turns a blind eye towards strong Aussie business conditions index
|AUD/JPY remains on the back foot this Tuesday morning in Asia, currently trading 0.32% lower on the day at 57.53 levels.
The National Australia Bank's survey of more than 400 firms showed its index of Australia business conditions firmed 1 point to +15 in August, the highest level since early 2008. The sub indices show a notable in employment to near record high levels in August. Firms also reported a pickup in labour and purchase cost.
However, the Aussie is no mood to cheer the strong business conditions data. This could be due to the fact that a technically overbought Aussie has been looking for reasons to shed a few pips. Thus, the drop in the NAB business confidence seems to have got all the attention from the AUD.
The dip in the cross could be short lived, especially if the stock markets in Europe and America extend Monday's risk-on rally. Note that an uptick in China's PPI (release on Saturday) is positive for the Aussie and other risk assets.
AUD/JPY Technical Levels
A break below 87.31 [10-DMA] would open doors for a sell-off to 86.60 [support offered by the trend line sloping upwards from Aug 11 low and Aug 24 low]. An end of the day close below the same would signal resumption of the sell-off from the July high of 89.42 and could yield 85.46 [200-DMA]. On the higher side, breach of resistance at 87.94 [Sep 1 high] would open up upside towards 88.70 [Aug 1 high] and 89.00 [zero levels].
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