AUD/JPY Price Analysis: Recovery needs validation from 94.80, China PMIs

• AUD/JPY braces for the first weekly gain in three, grinds higher of late.
• Convergence of 50-day EMA, 13-day-old resistance line and previous support line challenge the upside moves.
• Bearish MACD signals, downbeat RSI favor sellers, bulls have a bumpy road ahead.

AUD/JPY grinds higher around 94.00, on the way to snapping a two-week downtrend, during Friday’s Asian session. In doing so, the cross-currency pair pays little heed to the downbeat oscillators while staying above the key Fibonacci retracement levels.

It’s worth noting that the RSI (14) and the MACD both flash bearish signals but a convergence of the 50-day EMA, the previous support line from May and a three-week-old resistance confluence, near 94.80, appears a tough nut to crack for the AUD/JPY bulls.

Also acting as an upside hurdle is June’s peak near 96.90, a break of which could quickly propel the pair prices towards the recently flashed multi-day high near 98.60.

Alternatively, 50% and 61.8% Fibonacci retracement of the AUD/JPY pair’s May-September upside, respectively near 93.00 and 91.60, could challenge the downside moves.

In a case where AUD/JPY remains bearish past 91.60, the odds of witnessing a south-run towards the 90.00 threshold can’t be ruled.

Above all, today’s release of China’s official and Caixin PMIs for September and the Fed’s preferred inflation gauge, namely the Core Personal Consumption Expenditure (PCE) Price Index for August, expected 4.7% YoY versus 4.6% prior, are crucial for AUD/JPY pair.

Also read: AUD/USD pierces 0.6500 hurdle ahead of China PMIs, US PCE Inflation

AUD/JPY: Daily chart

Trend: Limited upside expected