AUD/JPY Price Analysis: Retreats from weekly hurdle on softer China PMI

• AUD/JPY reverses from intraday high on downbeat China PMIs, unchanged Aussie Retail Sales favored buyers earlier in the day,
• RSI retreat jostles with bullish MACD signals to confuse traders but sustained trading above 200-HMA favor bulls.
• Multiple levels to challenge buyers beyond the monthly high.

AUD/JPY pares intraday gains while taking offers at around 94.90 during Monday’s Asian session. In doing so, the cross-currency pair takes a U-turn from the one-week-old symmetrical triangle’s resistance line after downbeat China PMI data.

China’s official NBS Manufacturing PMI for October dropped to 49.2 versus 50.0 expected and 50.1 prior. Further, the Non-Manufacturing PMI also slumped to 48.7 compared to 51.9 market forecasts and 50.6 previous readings. “China's factory activity unexpectedly fell in October, an official survey showed on Monday, weighed by softening global demand and strict COVID-19 restrictions, which hit production,” said Reuters following the data.

It should be noted, however, that the room for the quote’s further downside appears limited as the RSI (14) challenges the bullish MACD signals.

That said, the AUD/JPY bears may currently aim for the lower line of the stated triangle, close to 94.50. However, the 200-HMA level surrounding 94.40 could challenge the pair’s further downside.

On the contrary, an upside break of the immediate resistance line, forming part of the stated triangle near 95.10, will need validation from the daily top surrounding 95.15 to convince AUD/JPY buyers. Following that, a run-up toward the monthly high of 95.73 can’t be ruled out.

To sum up, the data-directed moves of the AUD/JPY appear ephemeral as technical details challenge the bears.

AUD/JPY: Hourly chart

Trend: Limited downside expected