For the second consecutive day, the AUDJPY exchange rate at 94.3360 has been increasing and is continuing to recover from its lowest point this month.

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• AUD/JPY scales higher for the second straight day and recovers further from the monthly low.

The pair currently trades last at 94.3360.

The previous day high was 94.22 while the previous day low was 93.27. The daily 38.2% Fib levels comes at 93.86, expected to provide support. Similarly, the daily 61.8% fib level is at 93.63, expected to provide support.

The AUD/JPY cross builds on the previous day’s late recovery from the 93.25-93.20 area, or its lowest level since June 9 and gains some positive traction for the second successive day on Thursday. Spot prices climb to a two-day high, around the 94.40 region during the Asian session and now look to extend the momentum further beyond the 100-hour Simple Moving Average (SMA).

The prevalent risk-on environment – as depicted by an extended rally in the equity markets – undermines the safe-haven Japanese Yen (JPY) and turns out to be a key factor acting as a tailwind for the AUD/JPY cross. The Australian Dollar (AUD), on the other hand, draws support from the underlying bearish sentiment surrounding the US Dollar (USD), which continues to be weighed down by expectations that the Federal Reserve (Fed) is nearing the end of its rate-hiking cycle.

The AUD bulls, meanwhile, seem rather unaffected by the disappointing release of Chinese Trade Balance data, which showed that the surplus widened less than expected, $70.62 billion in June from $65.81 billion in the previous month. Additional details of the report showed that exports plunged by 12.4% as compared to the 9.5% fall anticipated. Furthermore, imports declined by 6.8% and add to worries about a slowdown in the world’s second largest economy.

The upside potential for the AUD/JPY cross, however, seems limited in the wake of speculations that the Bank of Japan (BOJ) will adjust its ultra-loose policy settings as soon as this month. The expectations pushed the yield on the benchmark 10-year Japanese Government Bond (JGB) to its highest level since April earlier this week. This, in turn, should lend some support to the JPY and contribute to keeping a lid on any meaningful appreciating move for spot prices.

Hence, it will be prudent to wait for strong follow-through buying before confirming that the recent sharp corrective decline from the YTD peak touched in June has run its course and placing fresh bullish bets around the AUD/JPY cross.

Technical Levels: Supports and Resistances

AUDJPY currently trading at 94.31 at the time of writing. Pair opened at 93.99 and is trading with a change of 0.34 % .

The pair is trading below its 20 Daily moving average @ 95.91, above its 50 Daily moving average @ 93.52 , above its 100 Daily moving average @ 91.53 and above its 200 Daily moving average @ 91.83

The previous day high was 94.22 while the previous day low was 93.27. The daily 38.2% Fib levels comes at 93.86, expected to provide support. Similarly, the daily 61.8% fib level is at 93.63, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 93.44, 92.88, 92.5
• Pivot resistance is noted at 94.38, 94.77, 95.32

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