AUD/JPY: Bears look for a test of the 77 handle, await Chinese GDP

• AUD/JPY has been capped and rejected with long hourly shadows amid bullish recovery from flash crash lows. 
• The cross will monitor US stocks for direction amidst US government shutdown risks. 
• AUD/JPY awaits Chinese data today to kick things off. 

AUD/JPY has been drifting higher since the recovery of the flash crash that took the pair to the lowest levels since 2010. The cross has been able to climb on dollar weakness, a bid in commodities, (oil is the hottest its been since 2001, +18%), and renewed investor optimism in the best start to the year for stocks in at least a decade. 

AUD/JPY is regarded as the market's risk barometer and the week ahead should be compelling enough when the US returns from  Martin Luther King Jr. Day. considering the US government will be in partial shutdown for its 29th day in a row and investors should start to pay more attention considering the number of jobs that are at stake and to the detriment of the US economy, (losing 0.1% every two weeks in GDP). 

Meanwhile, today agenda has Chinse GDP Q4 and if this proves that indeed growth has slowed for the quarter, the Aussie will likely come under significant pressure, weighing on the cross, especially if risk-off takes a hold earl on this week, correcting last week's optimistic finish. 

• China's growth pulse has decelerated through 2018 - Westpac

AUD/JPY levels

AUD/JPY is chipping away at the downside, eyeing S1 located at 78.37 with the confluence of the 21 4hr SMA just tucked in below at 78.35. This also meets two 4hr fractals 11th and 16th Jan. On break there, there is support way to 77.75 and then 77.07.