The AUDJPY pair, which was trading at 94.2330, managed to recover from a drop during the Asian session and reach the 94.00 level. However, there is a lack of sustained momentum.

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• AUD/JPY reverses an Asian session dip to the 94.00 mark, albeit lacks follow-through.

The pair currently trades last at 94.2330.

The previous day high was 94.34 while the previous day low was 93.78. The daily 38.2% Fib levels comes at 94.13, expected to provide support. Similarly, the daily 61.8% fib level is at 94.0, expected to provide support.

The AUD/JPY cross attracts some dip-buying in the vicinity of the 94.00 mark during the Asian session on Tuesday and turns positive for the third successive day. Spot prices currently trade around the 94.25-94.30 region, or a two-week peak and now look to build on the recent bounce from the 100-day Simple Moving Average (SMA).

The Australian Dollar (AUD) continues to draw support from the latest optimism led by new measures rolled out by China over the weekend, which boosted investors’ confidence. It is worth recalling that China’s finance ministry took steps to draw investors back into its battered stock markets and announced on Sunday that the levy charged on stock trading will drop from 0.1% to 0.05% from August 28 – marking the first reduction since 2008. This remains supportive of a generally positive risk tone, which, in turn, is seen acting as a tailwind for the AUD/JPY cross.

Apart from this, a more dovish stance adopted by the Bank of Japan (BoJ) contributes to the Japanese Yen’s underperformance and lends some support to spot prices. In fact, the BoJ is the only central bank in the world to maintain negative rates and is expected to stick to its ultra-easy monetary policy settings. The bets were reaffirmed by BoJ Governor Kazuo Ueda’s remarks at the Jackson Hole Symposium on Sunday, saying that the underlying inflation in Japan remains a bit below the 2% target, ensuring that the central bank may keep the status quo until next summer.

That said, speculations that Japanese authorities will intervene in the foreign exchange markets to prop up the domestic currency hold back traders from placing aggressive bullish bets around the AUD/JPY cross. Furthermore, concerns about the worsening economic conditions in China also contribute to keeping a lid on any meaningful appreciating move for the China-proxy Aussie. This, along with expectations for another on-hold rate decision by the Reserve Bank of Australia (RBA) in September, warrants caution before positioning for any meaningful appreciating move.

Technical Levels: Supports and Resistances

AUDJPY currently trading at 94.29 at the time of writing. Pair opened at 94.21 and is trading with a change of 0.08 % .

The pair is trading above its 20 Daily moving average @ 93.84, below its 50 Daily moving average @ 94.73 , above its 100 Daily moving average @ 93.12 and above its 200 Daily moving average @ 91.9

The previous day high was 94.34 while the previous day low was 93.78. The daily 38.2% Fib levels comes at 94.13, expected to provide support. Similarly, the daily 61.8% fib level is at 94.0, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 93.88, 93.56, 93.33
• Pivot resistance is noted at 94.44, 94.67, 95.0

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