AUD/JPY: Rally loses steam on Aus retail sales miss

The overnight rally in the AUD/JPY cross lost steam at 77.20 region, after the Australian retail sales data missed expectations and weighed somewhat on the AUD.

AUD/JPY back below 5-DMA at 77.07

The AUD/JPY pair now trades +0.08% higher at 76.90, retreating from daily highs reached at 77.20. The cross in the AUD/JPY extends its retreat from higher levels after the sentiment around the Aussie was hit by softer Aus retail trade data, which came in at 0.1% m/m in June versus +0.3% expected and +0..2% last.

The latest leg lower in the cross can be also attributed to the comments from BOJ deputy governor Iwata, as he justified the reason behind BOJ’s latest easing measure. Moreover, mixed sentiment on the Asian indices coupled with weaker copper prices also capped the upside in the cross.

Looking ahead, markets now await the BOE policy decision ahead of the US jobless claims and factory orders data lined up for release later in the NA session. While the main risk event for the pair remains the US NFP data due tomorrow.

AUD/JPY Technical Levels

To the upside, the next resistance is located at 77.83 (10-DMA) and above which it could extend gains to at 78 (round number).To the downside immediate support might be located 76.50 (daily S1) below that at 75.89 (Jul 11 low).