AUD/JPY confined in tight range below 85.50

The AUD/JPY cross is back on the 85 handle amid re-emergence of risk-on trades, although the recovery remains capped by 85.50 barrier, as cautiousness still persists ahead of the Trump’s Healthcare bill vote by the House of Representatives.

The risk barometer, AUD/JPY, remains in a wait-and-see mode so far this session, awaiting further cues from the sentiment on the European session. The flattish movement seen around AUD/JPY is on the back of the recovery gains in USD/PY being offset by losses in the AUD/USD pair.

Next of relevance for the pair remains the US unemployment claims and new home sales data, while Fed Chair Yellen’s speech will also remain in focus for fresh insights on the US interest rates outlook.

Technical Levels

Higher side: 85.90/86 (100-DMA/ zero figure), 86.54 (50 & 100-DMA), 87 (round number)

Lower side: 85 (key support), 84.49/47 (Jan 5 & 6 lows), 84.02 (multi-week lows)