AUD/JPY - A dull response to upbeat China data

AUD/JPY is painfully slow in gaining ground despite a better-than-expected China industrial production and retail sales data release.

The pair added just 10 odd pips to trade around 86.37 levels following the data release.

China retail sales printed at 10.8% y/y for November, which is way above the expected figure of 10.1%. The industrial production number ticked higher to 6.2% against the expected rise of 6.1%.

Strong retail sales data are good news as far as the economic rebalancing process is concerned. However, despite the positives, the cross is having a tough time gaining more ground.

AUD/JPY Technical Levels

A break above 86.61 (Monday’s high) would open doors for a possible cut through the psychological figure of 87.00 and a move towards 87.61 (61.8% of 2007 high - 2008 low). On the other hand, a breakdown of support at 86.00 (zero figure) could yield a re-test of the downward sloping monthly 100-MA level of 85.50. A violation there would expose 85.00 handle.