AUD/JPY drops ahead of Aussie retail sales data

The bid tone around the Japanese Yen strengthened in the early Asian session, pushing the AUD/JPY pair to a three-day low of 84.80 ahead of the Aussie data, which is expected to show the retail sales growth slowed to 0.3%  m/m in Feb from 0.4%.

Rejected at 10-DMA

An early attempt at taking out the 10-DMA (seen at 85.05) fell apart as speculation that Yen bears may come back from hibernation in April strengthened the Japanese Yen. Japanese investors usually repatriate overseas profits at the end of the fiscal year (Apr-Mar) and make fresh allocations in the first quarter of the fiscal year.

Meanwhile, the Tankan survey released by the BOJ showed the corporate sentiment improved for a second consecutive quarter in the three months to March. However, the data had little impact on the Yen pairs.

The Aussie side of the story could come into play over the next few years if the retail sales figure prints significantly higher/lower than the estimate.

AUD/JPY Technical Levels

The spot was last seen trading around 84.82. A break below 84.81 (Mar 22 low) would open doors for 84.35 (Mar 24 low) and 84.00 (zero levels). On the higher side, breach of resistance at 85.08 (session high) could yield a re-test of 85.41 (100-DMA) and 85.76 (Fri’s high).