AUD/JPY climbs towards the 50-DMA, shy of the 92.00 mark, ahead of Aussie/Japanese data

• The AUD/JPY begins the week on the right foot, gaining 0.97%.
• Risk-on market mood and China’s possible lockdowns lifting, cheered by investors.
• AUD/JPY Price Forecast: To remain upward biased, but struggling around 92.00, might open the door for a pullback towards 90.00.

The Australian dollar is extending its rally for the third consecutive day as the Asian begins, after Monday’s thin liquidity trading session in the FX market, courtesy of US holidays, keeping the New York session closed. At the time of writing, the AUD/JPY is trading at 91.84, up by a minimal 0.10%.

Market players’ mood boosted the Aussie, weighed on safe-havens

Improvement in risk appetite is one of the factors that boosted the appeal of the Aussie dollar. It advanced against most G7 currencies as news of China’s reopening and support for Beijing business was cheered by investors. European bourses closed in the green, while US equity futures point to a higher open on Tuesday’s cash market session.

Diggin a little deep into China’s news, Shanghai port is now reported to be operating at a 95% capacity, which is upbeat news for supply chains.

Regarding the Japanese yen, the Bank of Japan (BoJ) Governor Kuroda repeated the commitment to monetary policy easing to help the economy recover from the Covid-19 slump while adding that rapid JPY moves are undesirable. However, Kuroda said that the FX market is regaining stability.

The Australian economic calendar would feature the ANZ-Roy Morgan Australian Consumer Confidence data, followed by Q1 GDP. Linked to the Australian data, China’s Caixin PMI will also be revealed. On the Japanese front, the docket would feature employment data, the Unemployment Rate, Retail Sales and Industrial Production.

 AUD/JPY Price Forecast: Technical outlook

The AUD/JPY rallied in the last three trading days, almost 200 pips. Monday’s price action witnessed an AUD/JPY test of the 50-day moving average (DMA) at 91.84, but so far, AUD/JPY bulls struggled and failed to deliver a daily close above it, which would have opened the door for further gains.

AUD/JPY traders need to be aware that technical indicators aim higher, except for the RSI, which is almost horizontal, at 54.53, indicating the cross-currency pair could consolidate before resuming the uptrend.

The AUD/JPY’s first resistance would be the 50-DMA. Break above would expose the 93.00 mark before reaching the May 5 swing high at 94.02. On the flip side, the AUD/JPY first support would be May 30 low at 90.88. A breach of the latter to send the pair towards May 24 swing low at 89.23, followed by the 89.00 mark.