AUD/JPY: Bouces up from 5-day MA, reinforcing channel breakout ahead of RBA minutes

• AUD/JPY has bounced up from the ascending 5-day moving average (MA) of 80.02, reinforcing the sideways channel breakout confirmed on Friday.
• The AUD may take a beating if the Reserve Bank of Australia April meeting minutes, due at 01:30 GMT, sounds more dovish-than-expected.

AUD/JPY is currently trading largely unchanged on the day at 80.32, having found bids at the ascending (bullish) 5-day moving average (MA) of 80.02 earlier today.

The bounce from the key average support validates the upside break of the 2.5-month-long sideways channel confirmed on Friday. Put simply, the path of least resistance is to the higher side.

The rally toward the crucial resistance at 81.18 (Nov. 21 low), however, may not materialize if the minutes of the RBA's April meeting, send a strong easing signal, forcing markets to price in the possibility of a rate cut next month.

However, with an election and fiscal boost around the corner, the RBA is unlikely to cut rates in May, according to analysts at TD Securities. So, the minutes are unlikely to provide any dovish surprise.

Technical Levels