AUD/JPY recovery appears capped by 77.00, despite risk-on

The AUD/JPY cross is seen reversing a steep drop near 76.70 region, now taking the recovery back towards 77 handle amid oil-driven risk-on market profile.

AUD/JPY eyes 10-DMA at 77.02

The AUD/JPY pair advances +0.34% to fresh session lows of 76.20 falling further below a break of 76.50 levels. The cross in the AUD/JPY is seen bouncing-off lows and remains strongly bid amid a rebound in the European equities and oil prices, which continue to underpin the sentiment behind the higher-yielding currency AUD.

However, further recovery appears capped in wake of sharp losses seen in USD/JPY, the greenback corrects lower across the board after Friday’s rally, triggered by better-than expected US CPI data, which refueled Fed rate hike expectations for this year.

Markets now await the RBA meeting minutes due for release tomorrow ahead of the BOJ monetary policy decision due in the Asian morning on Wednesday, which will provide fresh direction on the cross.

AUD/JPY Technical Levels

To the upside, the next resistance is located at 77.02 (10-DMA) and above which it could extend gains to at 77.48/50 (20 & 50-DMA).To the downside immediate support might be located 76.06 (multi-week lows) below that at 75.50 (psychological levels).