• AUD/JPY reverses early Asian corrective pullback near weekly low.
• Downbeat RSI, sustained trading below key SMAs keep sellers hopeful.
• 3.5-month-old horizontal support will be a tough nut to break for the bears.

AUD/JPY extends pullback from intraday high, reversing early day gains, to retest the 83.00 threshold during early Wednesday. In doing so, the cross-currency pair reacts to the latest China PMIs for June while directing the SMA breakdowns toward crucial support.

China’s headline NBS Manufacturing PMI crossed 50.8 forecast to 50.9 but lagged behind the 51.00 prior in June while the Non-Manufacturing PMI stayed below 55.2 prior despite crossing 52.7 market consensus with 53.5 readings.

Read: Chinese PMIs beat estimates but are below priors

Given the downward sloping RSI joining the AUD/JPY pair’s sustained weakness below 50-day and 100-day SMA, the quote is well set to revisit horizontal support from mid-February near 82.40.

Even if likely oversold conditions of RSI may challenge the pair’s further weakness past 82.40, the monthly low of 82.13 and the 82.00 round figure, not to forget the February 17 swing low near 81.75, will lure the bears afterward.

Alternatively, 100-day SMA near 83.95 and the latest swing high near 84.25, quickly followed by a 50-day SMA level of 84.37 could restrict the quote’s short-term recovery moves.

It’s worth noting that a downward sloping trend line from May 10, near 84.50, becomes a crucial upside barrier during the AUD/JPY recovery, a break of which should recall the bulls targeting the monthly top of 85.20.

AUD/JPY DAILY CHART