AUD/JPY gives back Asia gains as Chinese CPI data disappoints

• AUD/JPY pares back session gains on China CPI softening.
• Downward pressure to continue as markets weigh risk appetite.

AUD/JPY is down on reaction from softening Chinese CPI data, down near 84.70 and poised to slip further.

The Aussie initially had an upbeat swing to it following the Monetary Policy Statement from the Reserve Bank of Australia (RBA). The RBA was expected to trim their long-term inflation expectations, but held them steady instead, giving the Aussie cause to celebrate, but that positivity was short-lived,  as CPI data from China showed a softening in price inflation growth, with January year-on-year data showing 1.5% growth as expected, and month-over-month data for January coming in at 0.6% vs the expected 0.7%.

Softening inflation in China was enough to bring the AUD/JPY back down on reaction, with the pair intially touching 84.67 on release; continued downside risks to the Aussie remain today as markets are keeping their fingers close to the panic button, with risk aversion a popular theme this week. 

AUD/JPY Technicals

With the recent strength of the Japanese Yen as investors flee risk in favour of safer assets, AUD/JPY has plenty of room fall, but traders will first have to contend with swing support at 83.40, and upside swings are likely to be capped by resistance at 85.88 and the 200-day SMA at 86.50.

Today's pivot points:
R2: 86.51
R1: 85.56
PP: 85.04
S1: 84.09
S2: 83.57