AUD/JPY: bears taking control, but yen bears to prevail?

AUD/JPY is currently developing a bearish case and testing below the 1hr 200 sma.

AUD/JPY has been better offered since the supply at 77.23 after the recovery of the sell-off from 77.52 and post BoJ announcements. The Yen has been two way business on a mixed outlook and interpretation from the BoJ as markets now await to see if they can achieve their objectives with the new approach in respect of longer term yields and hoping to prop up the banking sector and shares.  

Bank share prices in Japan have bounced on the back of their efforts to counter the impact of low/negative rates and flat yield curves on the financial sector by targeting 10-year JGB yields at about zero. However, while the value of Yen was not an apparent factor, it is desirable and with the Fed on hold and the RBA's new governor not pressing for rate cuts, AUD/JPY upside could be favourable in the near term while price continues to stablise above the 76 handle. 

AUD/JPY levels

AUD/JPY is testing the 20 dma at 77.23 ina daily bearish formation within the late April 2016 sell-off from 86.29 that scored a low of 72.45. 76.00 remains the key support while the 200 dma at 80.00 is the upside psychological target. RSI on the 1hr offers further downside potential while the FXStreet TREND INDEX offeres a strongly Bearish bias with the OB/OS INDEX in neutral on a low VOLATILY INDEX.