AUD/JPY erodes 25 pips rapidly from 3-month tops, Aus trade weighs

• Ends 2-day winning streak.
• Aus trade data and N. Korea headlines weigh.
• US NFP in focus.

The cross in the AUD/JPY extended its rally and went on to hit fresh three-month highs at 88.75 in Asia, before meeting fresh supply on downbeat Australian trade figures the knocked-off the rates to the midpoint of the 88 handle.

AUD/JPY: USD on the back foot ahead of NFP

The cross faced double whammy and witnessed some aggressive selling over the last hours after the AUD/USD pair came under renewed weakness on the back of a downside surprise seen in the Australian trade report. Australia's trade balance shrank unexpectedly in November.

Moreover, fresh North Korea headlines that crossed the wires also spooked the markets and lifted the sentiment around the safe-haven Yen briefly. Thus, collaborating the latest leg down in the cross. North Korea is said to be preparing for a rocket test launch.

Focus now shifts towards the upcoming US payrolls data for further impetus on the cross, as the data is likely to have a significant impact on the USD price-action, eventually impacting both the AUD and JPY.

AUD/JPY Technical View

Higher-side levels: 88.75 (3-month tops), 89 (round figure), 89.13 (classic R2/ Fib R3)

Lower-side levels: 88.24 (5-DMA), 88.01 (10-DMA), 87.69 (Jan 3 low)