AUD/JPY challenges long-term ascending trend line, dips below 86.00

  • AUD/JPY dipped below 86.00 for the first time since late August.
  • The ascending trend line (drawn from the Jun. 2016 low and Mar. 2017 low) has been breached.
  • Weaker-than-expected Aussie wage growth numbers hurt the AUD.

A combination of the weaker-than-expected the Aussie wage price index and the decline in the treasury yields pushed the AUD/JPY to a session low of 85.84 today.

The AUD is being offered across the board as the wage price index for Q3 came-in at 0.5 percent quarter-on-quarter vs. 0.7 percent expected. The annualized figure came-in at 2.0 percent vs. 2.2 percent expected.

Meanwhile, a 2 basis point drop in the US 10-year treasury yield strengthened the bid tone around the Japanese Yen.

Further, the AU-Japan 10-year yield spread narrowed/dropped to 255 basis points from 261 basis points. As of writing, the cross is trading at 85.87 levels.

AUD/JPY Technical Levels

A break below 85.70 (end Aug. low) would open up downside towards 85.45 (August low) and 85.20 (end Jan. low). On the higher side, a move above 86.02 (200-day MA) would expose 86.31 (previous day's low) and 86.56 (Sept. 6 low).

 

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