AUD/JPY supported at 85 amid weaker USD & risk-off

AUD/JPY has entered a phase of downside consolidation as we head into early Europe, with continued USD weakness dominating fx markets on Tuesday.

AUD/JPY trades below 5-DMA at 85.22

The AUD/JPY pair now drops -0.20% to 85.19, managing to hold above 85 handle. AUD/JPY, fear gauge, remains on the offers as below expectations Australian retail sales and Chinese CPI data triggered a fresh risk-aversion wave across the financial markets.

However, the losses remain limited as the rebound staged by the AUD/USD pair somewhat offsets the ongoing bullish move in the yen against its American counterpart. Markets will pay close attention to the changes in the RO-RO trends, heading into a data-light European session.

Technical Levels

Higher side: 86 (zero figure), 87.17 (Dec 16 high)

Lower side: 84.97 (10-DMA), 84.43 (50-DMA)