AUD/JPY takes out 38.2% Fib supp, eyes 50-DMA

AUD/JPY has extended the early Asian session losses to trade below 86.50 [38.2% fib R of 81.78-89.42] as the Japanese Yen remains bid, while the China inflation and Aussie home loans data failed to impress the AUD. 

The currency pair currently trades around 86.38 levels and looks set to test the upward sloping 50-DMA level of 86.00 levels. 

China PPI offered no positive surprise, thus the mood in the markets remains tense, courtesy of the heightened tensions between US and North Korea. 

Risk aversion ahead

The sharp sell-off in the AUD/JPY is usually followed by a bout of risk aversion in the European and American equity markets. SP 500 futures are currently down 0.36%. DAX futures indicate the index is likely to open lower by 29 points. 

AUD/JPY Technical Levels

The 50-DMA level of 86.00 could offer support, which if breached, would expose 85.73 [July 7 low] and 85.60 [50% Fib R of 81.78-89.42]. The daily RSI has turned bearish. 
On the higher side, a break above 86.50 [38.2% Fib R of 81.78-89.42] would expose 87.00 [zero levels] and 87.31 [5-DMA] levels.