AUD/JPY capped below 84 handle, despite risk recovery

The AUD/JPY cross has entered a phase of upside consolidation, after the overnight recovery backed by depleting risk-off trades.

Risk reset emerged the key theme so far this session, as markets eagerly look forward for a successful conclusion to a 2-day Trump-Xi Summit, which begins Thursday.  

Moreover, positive Asian stocks and oil prices also collaborated to the upbeat tone seen around AUD/JPY, a risk barometer.

However, over the last hours, the cross is seen losing the upside momentum, as markets appear to have turned cautious ahead of the key US ADP jobs data and FOMC minutes due later on Wednesday.

Technical Levels

Higher side: 84.37/41 (5-DMA/ classic R1), 85.05 (classic R2/ Fib R3), 85.43/50 (20-DMA/ round number)

Lower side: 83.50 (psychological levels), 83.00 (zero figure), 82.66 (200-DMA)