USDJPY TECHS: Trend Needle Still Points North

AUD/USD has had a fairly quiet afternoon session so far, tracking a 0.7020-0.7040 range (last 0.7025). The currency is outperforming against most currencies in the G10 FX space though. AUD/JPY is holding close to session highs, last at 93.70/75, while the AUD/NZD cross probed above 1.1060. Note the 50-day MA in the cross comes in at 1.1059.

• The strength in the AUD/NZD cross (+0.25% for the session) is a little at odds with relative yield/rate differentials today, which have drifted lower. -5bps in the government bond space for the 2yr tenor, while a similar move in the swap space.
• The A$ has likely seen greater benefit today from the more positive China rhetoric, with the NDRC talking up efforts to stabilize the growth backdrop and further support for the property sector.
• There hasn't been much follow through in terms of commodity prices though. Copper is back to flat on the day, while iron ore is holding under $108/tonne.
• Looking ahead, as we highlighted late last week, tomorrow shapes up as a key day for the AUD/NZD cross with AU Q2 wages data. The market expects a 0.8% QoQ outcome (0.7% previously), which would take the YoY pace to 2.74% (from 2.4% in Q1). The RBA stated in the minutes that its liaison program suggested wages growth was continuing to rise. The recent NAB business survey painted a similar picture.
• Also out is the RBNZ decision. The market expects a 50bps hike, but most of the focus is likely to rest on the bank's forward guidance (see our preview here for more details).

• RES 4: 0.8627 High Jul 4
• RES 3: 0.8585 High Jul 21 and a key resistance
• RES 2: 0.8525 High Jul 25
• RES 1: 0.8493 High Aug 12
• PRICE: 0.8433 @ 06:27 BST Aug 16
• SUP 1: 0.8410/8340 Low Aug 8 / 2 and the bear trigger
• SUP 2: 0.8313 Low Apr 22
• SUP 3: 0.8246 2.0% 10-dma envelope and low Apr 14
• SUP 4: 0.8203 Low Mar 7 and a key support

EURGBP traded lower Monday and has remained below Friday’s high. The broader outlook is bearish and the recent move higher is likely a correction. Price action since mid-June has established a sequence of lower lows and lower highs. Moving average studies are in a bear mode set-up too, reinforcing a bearish theme A resumption of weakness would open 0.8313, Apr 22 low. Friday’s high of 0.8493 is the first resistance.