AUD/JPY - Weak tone persists, hovers around 50-DMA

AUD/JPY is trading around the 50-DMA level of 86.61 this Monday morning in Asia, as the weakness in the US index futures is ensuring the follow through to Friday’s recovery from 85.99 is weak. 

Focus on broader market sentiment

The AUD/JPY cross is at the mercy of the sentiment in the equity markets today, given the light data docket in Asia. The losses in the equities would strengthen the bid tone around Yen and weigh over AUD/JPY and vice versa. 

As of now, the SP 500 futures are trading flat lined. NASDAQ futures are down 0.14%. UK’s FTSE 100 futures are down 0.23%, while DAX futures are down 5 points. The losses in the major index futures are capping the upside in the AUD/JPY cross. 

Meanwhile, the AUD may find buyers if gold prices retake $1300 levels today. 

AUD/JPY Technical Levels

A break above 87.04 [Aug 18 high] would open up upside towards 87.55 [Aug 17 high] and 88.02 [Aug 7 high]. On the downside, breach of support at 86.61 [50-DMA] could yield a sell-off to 85.99 [Friday’s low], under which a major support is seen at 85.45 [Aug 11 low].