AUD/JPY recovery remains capped near 78.70

The AUD/JPY cross is seen consolidating the downside near the mid-point of 78 handle, having failed several attempts to recover above 78.70 region.

AUD/JPY manages to keep 78 barrier

The AUD/JPY pair now drops -0.65% to 78.53, reversing a spike to 78.72 levels. The bears retain control, pouring cold water on any recovery in AUD/JPY to the upside as the yen continues to remain in demand amid reports of shrinking Japanese stimulus package.

However, the cross finds support from a robust rally staged by AUD/USD beyond 0.75 handle, as markets cover their shorts ahead of the crucial Australian CPI report and FOMC interest rates decision due Wednesday.

AUD/JPY Technical Levels

To the upside, the next resistance is located at 79.11 (5-DMA) and above which it could extend gains to at 79.51 (10-DMA).To the downside immediate support might be located 78.23/16 (50-DMA/ daily low) below that at 77.82 (daily S3).