The AUDJPY tested 100 day MA (82.087 today) on Friday and fell to the 200 day MA at 81.284. Today, the price fell below the 200 day MA keeping the pressure on the pair. The decline is congruent with the fall in the AUDUSD. The price is below the midpoint of the 2012 up and down range. That level comes in at 81.529. The price below these levels gives the pair a bearish bias. A move above the 81.28 would be needed to change the bias for the longer term traders
Looking at the hourly chart, the price fell below trend line support line that extended back to June 12th and defined the low for the pair on a number of corrections since then (see number points in the hourly chart below). That line currently comes in at the 80.52 level. The price is currently testing this level after finding support buyers as the price approached the two week low at 80.03 (the low today reached 80.13). It is decision time for the pair.
Those traders looking short from above are likely looking for the corrective momentum to fade at the current level and for a resumption lower. A move below the low from last Monday at 80.45 should give the shorts some relief.
The buyers from below (and those caught on the move down), would like to see the price keep the corrective move higher continue with 80.889 (38.2% of the move down from Friday’s high) as the next target. This level also corresponds with the low from Tuesday (at 80.93). I would expect sellers against this level with stops on a break above.
Later tonight, China Flash PMI index will be released (at 10:30 PM ET). Last month the index came in at 48.1 (lower from the prior month. The price of the AUDJPY fell modestly but later rebounded. The action in the AUDJPY may also be influenced by the AUDUSD reaction. The AUDUSD fell below the 200 hour MA at the 1.0280 level as well as the 200 day MA at the same area (1.0278). As the AUDUSD goes, so should go the AUDJPY. So watch this level through the release.
