AUD/JPY Price Analysis: Remains on the defensive near 93.50, within a descending trend channel

The AUD/JPY cross struggles to gain and hovers around the 93.50 region heading into the early European trading hours on Monday. That said, the optimistic development from China boosts the Australian Dollar against its rivals. The Chinese Ministry of Commerce announced on Friday that China will lift its anti-dumping and anti-subsidy tariffs on Australian barley imports effective August 5.

Meanwhile, the BoJ's Summary of Opinions for the July meeting stated that achieving 2% inflation in a sustained and steady manner seems to be in sight. The news adds hints of a more cautious approach to Yield Curve Control (YCC) policy and weighs on the Japanese Yen.

From a technical perspective, AUD/JPY trades within a descending trend channel line from the middle of June on the four-hour chart. 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 immediate resistance level for AUD/JPY is seen at 94.00, the 50-hour EMA, and a psychological round mark. The next barrier to watch is 94.40 (100-hour EMA), en route to 95.40 (High of July 14) and finally at 95.50 (the upper boundary of a descending trend channel).

On the flip side, the cross will meet an initial support level at 93.00 (a psychological round figure, Low of August 4). The next downside stop appears at 92.60 (the swing low of July 28), followed by 92.35 (the lower limit of a descending trend channel). A break below the latter will see a drop to 92.15 (Low of June 6).

It’s worth noting that the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) hold in bearish territory, supporting the sellers for now.

AUD/JPY four-hour chart