AUD/JPY remains bid ahead of Aussie wage inflation data

AUD/JPY is trading on the front foot around the 86.60 mark this Wednesday morning ahead of the Aussie data release, which is expected to show the pace of rise in the wage price inflation held steady in the second quarter. 

The uptick in the cross is largely due to the losses in the Japanese Yen on account of the easing US-NKorea tensions and an upbeat US retail sales data. The 0.13% rise indicates the risk assets may remain mildly bid in Europe and America. 

The immediate focus is on the Q2 Aussie wage price index [due at 01:30 GMT], which is seen rising 1.9% y/y and 0.5% q/q. A better-than-expected number may strengthen the bid tone around the Aussie dollar and vice versa. 

AUD/JPY Technical Levels

A break above the 10-DMA level of 86.63 would be encouraging for the bulls, but should be viewed with caution, given the average is still sloping downwards and the next resistance is located just a few pips away at 87.00 [July 4 high] and 87.37 [Aug 3 low]. 

On the lower side, breach of support at 86.50 [38.2% Fib R of 81.78-89.42] would open up downside towards 86.28 [5-DMA] and 86.00 [zero levels].