AUD/JPY stages solid recovery, 200-DMA on sight

Dhwani Mehta FXStreet

The cross in the AUD/JPY staged a solid recovery from weekly lows reached last week, and now hovers near daily tops above 79 handle on the back of risk-on rally in the European equities and stalled USD buying.

AUD/JPY regains 79 handle and beyond

The AUD/JPY pair, currently, jumps +0.42% higher at 79.39, flirting with daily tops reached at 79.39 post-European open. At the moment the cross is seen consolidating the recovery, as the bulls take a breather before the next push higher.

The recovery in the cross is mainly driven by a steady recovery witnessed in AUD/USD as the higher-yielding currency benefits from persistent risk-on trades. While on the JPY-side of the story, the dollar-yen pair extends its upside consolidation phase below 104 handle, with markets awaiting the US manufacturing PMI and Fed speeches for further momentum.

Later this week, the main risk event for the major remains the Australian Q3 inflation report and US advance GDP figures, which will have a significant impact on the cross.

AUD/JPY Technical Levels

To the upside, the next resistance is located at 79.65 (200-DMA) and above which it could extend gains to at 80.00 (psychological levels).To the downside immediate support might be located 78.80 (20-DMA) below that at 77.91/84 (50 & 100-DMA).

1. R3 79.28
2. R2 79.20
3. R1 79.09
PP 79.01
1. S1 78.91
2. S2 78.83
3. S3 78.73

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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