AUD/JPY - Indecision on charts, but risk reversals at 14-month high

• Doji candle on weekly chart shows indecision.
• Risk reversal at 14-month high indicates favors upside in the pair.

Having printed high/low of 88.10/86.69 last week, the AUD/JPY pair ended on a flat note at 87.22 levels. The price action (Doji) on the weekly charts indicates indecision.

At press time, the currency pair is trading at 87.42 levels; up 0.17 percent on the day. The pair is being pushed higher by the uptick in the Dollar-Yen pair.

Melbourne Institute's survey (TD Securities Inflation) for October came-in as expected at 0.3 percent m/m. The annualized number ticked higher to 2.6% from 2.5%, although is has done little to strengthen the bid tone around the Aussie.

Meanwhile, the BOJ minutes released today showed the current policy is not enough to achieve inflation 2 percent target.

Risk reversals at 14-month high

• The one-month risk reversals rose to -1.325; the highest level since Sep. 9, 2016.
• Though negative, the improvement in the risk reversals gauge from -2.438 (Sep low) shows improving call (bullish) bias.

AUD/JPY Technical Levels

 A convincing break above 87.43 (100-day MA) would open up upside towards 87.94 (Sep. 1 high) and 88.00 (zero levels). On the downside, breach of support at 87.19 (previous day's low) could yield a sell-off to 86.94 (Nov. 1 low) and 86.69 (Oct. 31 low).