AUD/JPY drops below 200-day MA

• Yen demand and the weaker-than-expected Aussie trade surplus is likely driving the AUD/JPY lower.
• The JPY cross has printed session lows below the 200-day MA and risks extending losses on treasury yield curve inversion.  

The AUD/JPY pair is currently trading at a session low of 81.76, having printed a high of 82.31 earlier today.

Notably, the currency pair has taken out the crucial 200-day moving average (MA) support of 81.87.

The weak tone could be associated with dismal Aussie data released in the last 24 hours. To start with, the Aussie third quarter GDP printed well below estimates yesterday, reinforcing expectations that the Reserve Bank of Australia (RBA) would keep rates at record lows until 2019.

Further, data released earlier today showed that Australia's trade surplus narrowed to AUD 2,316 million in October, missing the estimated figure of AUD 3,200 million. The retail sales did beat estimates, but are likely being overshadowed by the drop in the trade surplus.

Further, fears of economic recession stemming out of the US yield curve inversion have likely boosted the demand for the anti-risk Japanese yen. The USD/JPY pair is currently down 0.30 percent on the day at 112.82 and looks set to extend the decline toward the crucial 100-day MA of 112.24.

As a result, the AUD/JPY cross could continue to lose altitude, having breached the 200-day MA support a few minutes before press time. 

AUD/JPY Technical Levels