- AUD/JPY pushes back bearish bias after snapping two-day winning streak the previous day.
- Convergence of key EMA, two-week-old rising support line appears a tough nut to crack for sellers.
- China policymakers pledge more stimulus to defend the dragon nation, PBoC keeps Yuan afloat.
AUD/JPY clings to mild gains above 95.00 as it cheers China-linked risk-on mood during early Tuesday. In doing so, the cross-currency pair defends the previous day’s rebound from a convergence of the 50 and 100 Exponential Moving Average (EMA), as well as a two-week-long rising trend line.
Also read: USD/CNH slides to 7.1500 as PBoC defends Yuan, China stimulus loom
Apart from that, the upbeat RSI (14) line, not overbought, also underpins bullish bias about the AUD/JPY pair.
However, a downward-sloping resistance line from June 18, close to 95.70 at the latest, seems a strong hurdle for the bulls to cross for conviction.
Following that, the monthly high surrounding 96.85 and the yearly peak marked in June surrounding 97.70 will be in the spotlight.
In a case where the AUD/JPY remains firmer past 97.70, the previous yearly top of around 98.60 and the 100.00 psychological magnet could lure the bulls.
Meanwhile, a downside break of the 95.00 support confluence comprising the aforementioned key EMAs and the trend line could drag the quote toward the 50% Fibonacci retracement of the May-June upside, close to 93.95.
However, the monthly low and the 61.8% Fibonacci retracement, respectively near 93.30 and 93.10, adjacent to the 93.00 round figure, will test the AUD/JPY bears afterward.
AUD/JPY: Four-hour chart
Trend: Further upside expected
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