The AUD/JPY cross extended gains to hit a fresh session high of 87.05 levels after China’s fourth quarter GDP hit the growth target on credit stimulus.
China’s economy grew 6.8% in Q4, while the full year growth rate in 2016 was 6.7%; lowest in 26 years.
Industrial production plays spoil sport
The industrial production printed at 6% m/m, which was slightly lower than the expected figure of 6.1%. Meanwhile, retail sales came-in at 10.9% m/m, bettering the estimate of 10.7%.
The weak industrial production figure and the slowdown in the full year growth rate ensured the pair quickly erased gains and fell back to 86.93 levels.
The increased demand for the Japanese Yen ahead of the Trump inauguration event is working against the AUD/JPY bulls.
AUD/JPY Technical Levels
A break below 86.67 (monthly pivot R1) levels would open doors for a sell-off to 86.29 (Jan 13 high). A violation there could yield a drop to 86.10 (5-DMA). On the other hand, a breach of resistance at 87.15 (Dec 16 high) would expose 87.54 (Dec 15 high) above which the psychological hurdle of 88.00 could be put to test.
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