AUD/JPY fails to resist above 10-DMA post-Aus CPI

The AUD/JPY cross jumped almost 70-pips in a knee-jerk reaction to above estimates Aus trimmed mean CPI figures, although quickly reversed a part of the rally to now trade just ahead if 79 handle.

AUD/JPY back below 10-DMA at 79.51

The AUD/JPY pair now gains +0.84% to 79.16, quickly reversing a spike to 79.56 levels. The bulls appear not so impressed by upbeat Aus trimmed mean inflation figures, which suggest that RBA may remain on-hold at its policy review meeting held next week. The Australian CPI headline q/q came in at 0.4% vs 0.4% exp and -0.2% prior. While RBA trimmed mean q/q stood at 0.5 vs 0.4% exp and 0.2% last.

The Aussie failed to sustain the renewed rally above the mid-point of 79 handle, and almost gave back 50-pips over the last few minutes, as markets continue to weigh chance of a RBA rate cut as inflation still remains very low and at uncomfortable levels for the RBA.

However, the downside remains capped on the back of a solid recovery staged by the USD/JPY pair, after yesterday’s slump on shrinking potential Japanese stimulus package news.

Next of relevance for the cross remains the US durable goods and pending home sales data due later in the NA session ahead of the FOMC decision.

AUD/JPY Technical Levels

To the upside, the next resistance is located at 79.51/56 (10-DMA/ daily high) and above which it could extend gains to at 80 (round number).To the downside immediate support might be located 78.23/13 (50-DMA/ Jul 26 low) below that at 77.57 (daily S2).