AUD/JPY dips below 85.00

• AUD/JPY looks heavy, drops below 85.00
• Strong Japanese PMI and weak China PMI favor downside in the pair.

AUD/JPY bulls need to flex their muscles soon, else the pair could extend losses to 5-day MA of 84.79.  

As of writing, the currency pair is trading at 84.98. It clocked a high of 85.20 earlier today.

The China Caixin PMI released today showed marginal deterioration in operating conditions in November. Meanwhile, Japanese manufacturing PMI detailed the strongest growth in the activity in 44 years. The data clearly favor upside in the Yen (downside in the AUD/JPY pair).

Also helping the Yen are signs of risk aversion in the equities. The S&P 500 futures are down 9 points, possibly due to delay in the tax reform vote.

Ahead in the day, the broader market sentiment and the action in the treasury yields could influence the pair.

AUD/JPY Technical Levels

A convincing break below 85.00 (psychological level) could yield a pullback to 84.79 (5-day MA), under which a major support is seen at 84.35 (Nov. 27 low). On the higher side, breach of the hurdle at 85.20 (session high) would expose 85.50 (Nov. 15 low) and 85.90 (200-day MA).