Key Points
- The Aussie dollar after trading towards 87.30 against the Japanese yen found resistance.
- The AUDJPY pair is moving lower, and broke a bullish trend line at 87.10 on the hourly chart.
- In Japan, the All Industry Activity Index for Dec 2016 was released by the Ministry of Economy, Trade and Industry.
- The result was lower than the forecast, as there was a decline of 0.3% in Dec 2016, compared with the -0.2% forecast.
AUDJPY Technical Analysis
The Aussie dollar started a recovery from the 86.36 low against the Japanese yen, and managed to close above the 21 hourly simple moving average. The AUDJPY pair also moved above the 38.2% Fib retracement level of the last decline from the 88.24 high to 86.36 low.
However, the upside was paused near the 50% Fib retracement level of the last decline from the 88.24 high to 86.36 low. The pair moved down, and broke a bullish trend line at 87.10 on the hourly chart.
The pair may now continue to move down, and at least test the 21 hourly SMA. Any further losses could take the pair towards 86.60.
Japanese All Industry Activity Index
Today in Japan, the All Industry Activity Index (capturing the monthly change in overall production by all industries of the Japanese economy) for Dec 2016 was released by the Ministry of Economy. The market was expecting a decline of 0.2% in Dec 2016, compared with the previous rise of 0.3%.
The result was lower than the forecast, as there was a decline of 0.3% in Dec 2016. The report was not in line with the forecast, but there was no bearish impact on the Japanese yen.
Overall, it looks like the Aussie dollar struggle to trade higher may continue, and it could trade towards 86.80 against the Japanese yen in the short term.
