AUD/JPY looking to hold onto 82.50 ahead of retail sales

• Aussie catches a break after tanking against the Yen.
• Aussie Retail Sales to spark some volatility in the early Tokyo markets.

The AUD/JPY is trading on the high side, testing the waters near the 82.50 handle heading into the Tokyo session.

The Reserve Bank of Australia will be dropping their Interest Rate Decision today at 03:30 GMT, but with the RBA already widely anticipated to hold off on rate increases well into 2019, the indicator is expected to largely fizzle and the focus will likely be on Retail Sales for January due early at 00:30 GMT. A positive note from retail sales would be a welcome reprieve for the AUD/JPY after December's decline that ate away at November's 1.3% climb at retail cash registers, especially with the pair in such a steep state of decline ahead of Australian GDP numbers hitting the markets on Wednesday at 00:30.

The AUD/JPY pair tumbled 5.8% in February as the Aussie shapes up to be the currency market's biggest loser and the Yen continues to strengthen as the safe haven of choice whenever market sentiment takes a turn for the fearful. The Bank of Japan (BOJ) is in a quandary over the Yen's continued strength: market anticipation for the BOJ to begin tightening their easy monetary policy, yet with the Yen now threatening to undermine what little growth Japan has been able to experience, a reduction in easy policy is being pushed further and further out.

AUD/JPY Technicals

The pair managed to find a temporary reprieve from its steady decline on Monday, ironically when the Aussie markets were closed to celebrate Labour Day. The pair is deeply off its 200-day SMA, and technical indicators have begun to break themselves trying to show deeper oversold conditions. The H4 candles show a possible bottom from 81.50, but only if any soon-to-come retracement is able to hold above the level. Support levels are marked at 81.50 and 82.10, with swings to 83.15 and 83.51 acting as resistance.