AUD/JPY falls back below 200-DMA

The recovery in the AUD/JPY pair from the previous day’s low of 81.77 appears to have ended at 82.80 as the pair is back below the 200-DMA level of 82.63 levels in Asia. 

The corrective rally was the result of the Comey video, in which the former FBI director is seen testifying that no one had intervened with federal investigations. Comey was talking about the Department of Justice and did not say anything about Trump.  

The markets quickly realized the subtle fact and thus the recovery in the risk assets ran out of steam. The Yen regained the bid tone and may continue to be on the front foot ahead of Comey’s next testimony on Wednesday. 

Meanwhile, the rally in gold prices could support the Aussie dollar and restrict the downside in the AUD/JPY cross. 

AUD/JPY Technical Levels

The pair was last seen trading around 82.50 levels. A break above 82.63 (200-DMA) would expose resistance at 83.17 (5-DMA) and 83.51 (10-DMA). On the other hand, a breakdown of support at 82.33 (Wednesday’s low) could yield a pullback to 81.49 (Apr 19 low) and 81.00 levels.