AUD/JPY Price Analysis: Trims last Friday’s losses, and clings around 95.00

• AUD/JPY begins the week on the right foot and rises almost 1%.
• Investors’ mood turned sour late in the New York session due to US corporate earnings and Gazprom reducing gas flows in NS 1.
• AUD/JPY Price Analysis: Break below 95.00 would tumble the pair to 93.80s; otherwise, a challenge at 97.00 is on the cards.

AUD/JPY erases last Friday’s losses due to a risk-sensitive appetite in the FX space and edges up by 0.90%. The cross-currency pair began trading around 94.20 and dived to its daily low at 93.89 before rallying sharply above the 95.00 figure. At the time of writing, the AUD/JPY is trading at 95.07.

Sentiment deteriorated, and US equities finished with losses. Gazprom reduced NatGas flows through the Nord Stream 1 pipeline to 20%, painting a complex picture in the EU and fueling recession worries in the block area. The US Federal Reserve Interest Rate decision would keep traders’ moods fragile as the US central bank prepares to raise rates by 75 bps on Wednesday.

AUD/JPY Price Analysis: Technical outlook

From the daily chart perspective, the AUD/JPY is upward-to-neutral biased. Failure to record a fresh daily high above 96.88 keeps the cross with its current bias but is also subject to selling pressure, as sellers stepped in around the 95.30 area. Failure to reclaim a daily close above the latter would leave the pair vulnerable to selling pressure. Otherwise, an AUD/JPY rally towards the YTD high of around 97.00 is on the cards.

AUD/JPY 1-hour chart

During the last hour, the AUD/JPY consolidated around the R1 daily pivot, unable to break above 95.20. The AUD/JPY hit a daily high at 95.18 in a goodish momentum bounce provided by the Relative Strength Index (RSI). However, the rally appears to be losing steam, as the RSI’s shifted horizontally around 63 and slid below RSI’s 7-hour SMA as buying interest fades.

Therefore, the AUD/JPY is neutral biased. But as mentioned above, failure at 95.00 would be gladly welcomed by sellers. Hence, the AUD/JPY first support would be the 100-hour EMA at 95.04. Break below will expose the confluence of the 20 and 50-hour EMA around 94.70-77, followed by the 200-hour EMA at 94.48. Once cleared, the next support would be the July 25 low at 93.89.

AUD/JPY Key Technical Levels