AUD/JPY extends recovery from multi-year lows, good to buy dips

Poor Chinese inflation data released over the weekend raised concerns over China’s ability to boost the economic growth, denting risk appetite and boosting yen.

AUD/JPY slumped to a multi-year low of 80.88, levels not seen since Oct 2012, but was rejected at lows as buying emerged.

The pair later rebounded higher towards 82 handle, on the back of strong pullback seen in the USD/JPY pair, but strong resistance is seen at 81.95 levels.

Breaks above could take the pair to next hurdle at 82.95 (5-DMA) and then to 83.90 (Jan 8th highs).

To the downside immediate support might be located 80.88 (Session lows Jan 11) below that at 79.50 (Oct 2012 Level).

Broader market sentiment will continue to dominate markets amidst a data-light economic calendar today.

We would buy dips around 81.50, SL: 80.80, TP: 82.95/83.90

Trade active:

Upside in the pair was capped by 5-DMA which is currently at 82.44, further upside could be seen on break above

Booked partial profits around 83 levels, holding for further gains, raised trailing stops to 81.40

Trade active:

AUD/JPY has on the day breached 5-DMA resistance at 82.29

Momentum is with the bulls, gains upto 85 levels likely, raise trailing stops to 82 levels