Bears are finding it hard to push the AUD/JPY pair below 85.76 levels, which marks the confluence of the weekly 100-MA and 0.618 Fib ext. of June 6 low – June 20 high – June 22 low.
10-year JGB yield rises above 0.1%
The spike in the global bond yields yesterday is pushing the Japanese Government Bond (JGB) yields higher this Friday morning. The 10-year JGB yield rose to 0.109% in Asia, its highest level since late January.
Under the Bank of Japan’s (BoJ) yield curve control program, the 10-yr yield is to be maintained around zero percent. Thus, a rise in the yields may force the BoJ to boost its purchases. This could keep a lid on the gains in the Japanese Yen.
Meanwhile, weakness in gold prices is weighing over the Aussie dollar. The AUD/JPY cross, thus failed at 10-DMA level of 85.91 earlier today, although subsequent losses are being capped around 85.76 levels.
AUD/JPY Technical Levels
A break below 85.67 (Wednesday’s Doji candle low) would open doors for 85.06 (weekly 100-MA) and 84.77 (weekly 5-MA). On the other hand, a breach of resistance at 85.91 (10-DMA) could yield a re-test of 86.32 (previous day’s high) and 86.55 (Wednesday’s Doji candle high).
The key averages – 50-MA, 100-MA & 200-MA are sloping upwards and nicely positioned one below the other, suggesting potential for a rally.