AUD/JPY drops below 1-hour 100-MA on weak Aussie data

AUD/JPY fell below 1-hour 100-MA level of 88.33 after the Aussie retail sales posted their biggest fall since March 2013.

The Aussie-Japan 10-year bond yield spread narrowed to 274 basis points from 276 basis points.

Australia retail sales dropped 0.6 percent in August vs. expected rise to 0.3 percent. The previous month's print was revised lower to -0.2 percent from the initially reported print of 0.0 percent. The dismal retail sales print overshadowed the better-than-expected trade surplus figure of AUD 989 million.

Focus on RBA's Debelle speech

RBA Assistant Governor Debelle is scheduled to speak at 0530GMT. The policy maker may attempt to talk down the rate hike speculation. The Aussie dollar may suffer more losses if Debelle sounds dovish.

Meanwhile, the Japanese Yen is likely to take cues from the sentiment in the equity markets.

AUD/JPY Technical Levels

At press time, the currency pair is trading at session low of 88.25. A break below 88.00 [zero levels] would open doors for 87.65 [50-day moving average] and 87.55 [Aug 17 high]. On the other hand, a break above 88.33 [1-hour 100-MA] could yield re-test of 88.49 [1-hour 200-MA], above which the cross could have a go at the session high of 88.74.