AUD/JPY is back above 50-DMA ahead of China PPI release

AUD/JPY dipped to 85.98 earlier today before turning positive to trade above 50-DMA of 86.12 ahead of the China data release, which is expected to show China factory-gate inflation spiked most since 2008. 

PPI is seen rising 7.7%

China’s producer price index, also known as factory-gate prices have gained five straight months and as per Bloomberg survey is seen rising at the fastest rate since August 2008. 

That would be positive for the commodities and commodity dollars like the Aussie. The equity markets may cheer the strong PPI as well, thus the offered tone around JPY could strengthen. 

AUD/JPY Technical Levels 

A break above 86.34 (5-DMA) would expose 86.55 (previous day’s high), above which the spot may target 87.15 (descending trend line hurdle). On the downside, 50-DMA of 86.12 could offer support, which, if breached would open doors for a drop to 85.24 (Feb 7 low) and 85.00 (zero levels).