Share:

  • AUD/JPY trades within a descending trend channel line on the four-hour chart.
  • The first resistance level to watch is 94.00; the initial support level is located at 93.50.
  • The Relative Strength Index (RSI) and MACD stand in the bullish territory.

The AUD/JPY cross gains traction above mid-93.00s during the Asian trading hours on Wednesday. The Japanese Yen remains under pressure amid the divergence of monetary policy between Bank of Japan (BoJ) and the Reserve Bank of Australia (RBA). The cross currently trades around 93.74, up 0.04% for the day. 

That said, Japan’s preliminary Jibun Bank Manufacturing PMI for August rose to 49.7 versus 49.6 prior. The figure came in below the market expectation of 49.5. Meanwhile, Service PMI improved to 54.3 from 53.8 in the previous month.

On the Aussie front, the S&P Global Manufacturing PMI decreases to 49.4 from 49.6 anticipated and prior, while the Services PMI drops to 46.7 from 47.9 expected and previous month. Finally, the S&P Global Composite PMI for August falls to 47.1 from 48.2 in July.

According to the four-hour chart, AUD/JPY trades within a descending trend channel line from the middle of June. That said, the path of least resistance for the AUD/JPY is to the downside as the cross holds below the 50- and 100-hour Exponential Moving Averages (EMAs).

The first resistance level for AUD/JPY emerges at 94.00 (a psychological round figure). The additional upside filter to watch is 94.45, representing the upper boundary of a descending trend channel. Any meaningful follow-through buying above the latter will see a rally to 94.90 (high of August 9) en route to 95.40 (high of July 14) and finally at 95.85 (high of July 31).

On the downside, the cross will meet the initial support level at 93.50 (low of August 22). The next downside stop appears near a psychological figure at 93.00, followed by 92.65 (the midline of the descending trend channel). A breach of the latter will see a drop to 92.15 (low of June 6) and 91.80 (high of May 8)

It’s worth noting that the Relative Strength Index (RSI) holds above 50 while Moving Average Convergence/Divergence (MACD) stands in bullish territory. Both momentum indicators support the buyers for now.

AUD/JPY four-hour chart

This article was originally published by Fxstreet.com.Read the original article here.

RELATED ARTICLESMORE FROM AUTHOR