AUD/JPY is holding on to 1-hour 50-MA support

AUD/JPY is working hard to avoid a break below 1-hour 50-MA support of 86.87 after the upbeat Westpac Aussie consumer confidence index for July failed to boost the demand for the Australian dollar.

The consumer confidence rose to 0.4% in July from May’s -1.8% reading. Prior to June’s rebound, the index suffered a three month losing streak. Furthermore, the upbeat June reading pointed to dismal consumer spending as well. That may have kept the Aussie from catching a fresh bid wave.

Meanwhile, caution ahead of Yellen testimony due at 10 GMT today could also be keeping the gains under check.

Watch out for the BoJ

The Bank of Japan (BoJ) may step up its bond purchases (3yr-5yr) in order to curb the rise in the 5-year yield. The purchases are seen rising by about JPY 350 billion. Thus, the Yen is likely to remain on the back foot and ensure the 1-hour 50-MA support of 86.87 on the AUD / JPY cross remains intact.

AUD/JPY Technical Levels

The cross was last seen trading just below 88.00 levels. A break above 87.05 (resistance offered by the falling trend line on the 1-hour chart) would expose 888.18 (Feb 2017 high) and 88.68 (monthly 50-MA). On the other hand, breach of support at 86.87 (1-hour 50-MA) could yield a pullback to 86.52 (1-hour 100-MA) and 86.39 (1-hour 200-MA).