AUD/JPY Price Analysis: Struggles around 90.70s and retreats to the 90.60s area as mood turns sour

• The AUD/JPY begins the week on the right foot and is gaining some 0.64%.
• In the FX space, the market mood is mixed as safe-haven peers get buoyant and risk-sensitive currencies stalled.
• AUD/JPY Price Forecast: Bullish above 90.76 and bearish below the aforementioned, as it would open the door for a re-test of 87.30.

The AUD/JPY records minimal losses of 0.18% as the Asian session begins. On Monday, the cross recorded gains close to 0.90%, on a positive market mood, following a dismal week, particularly for US equities. At the time of writing, the AUD/JPY is trading at 90.63.

Sentiment shifted from positive to mix as Asian equity futures fluctuated post-Wall Street close. On Monday, the mood was positive due to some reports which stated that the US could consider lifting some trade tariffs on China, which was cheered by investors. That, along with increasing concerns that the US could be hit by a recession and optimism about global economic growth, kept market players shifting toward riskier assets.

On Monday, the AUD/JPY opened near the day's lows at around 90.18. Later, the cross soared and reached a daily high above the 91.00 mark but retreated somewhat and settled at approximately at 90.76.

AUD/JPY Price Forecast: Technical outlook

The AUD/JPY is trading around crucial support recorded on March 31 at 90.76. From the market structure perspective, failure at the previously mentioned level would open the door towards a re-test of the March 31 swing low at 87.30. Furthermore, the Relative Strength Index (RSI) slope shifted horizontally beneath the 50-midline, meaning that sellers could be exerting downward pressure on the pair.

Therefore, the AUD/JPY bias is neutral-downwards, and its first support would be the 90.00 mark. Break below would expose the May 19 swing low at 88.99, which, once cleared, would send the AUD/JPY aiming towards the confluence of the March 31 swing low and the 100-day moving average (DMA) at around 87.23-30.

Nevertheless, if AUD/JPY traders reclaim 90.76, that would open the door for a test of a downslope trendline. That said, the cross-currency pair's first resistance would be the March 31 swing low-turned-resistance at 90.76. A breach of the latter would send the AUD/JPY to 91.00, followed by the 50-DMA at 91.57 and the downslope trendline around the 92.00 area.

Key Technical Levels