• AUD/JPY trades within a descending trend channel on the four-hour chart.
• The first resistance level for the cross emerges at 94.40; the initial support level is located at 93.85.
• The Relative Strength Index (RSI), MACD stands in the bullish territory.

The AUD/JPY cross edges higher above the 94.00 mark during the early European session on Monday. The Chinese finance ministry said on Sunday that the authorities would reduce the 0.1% duty on stock trading to stimulate the capital market and strengthen investor confidence. This development triggers a risk-on mood and boosts the China-proxy Australian Dollar against the Japanese Yen.

Technically, AUD/JPY trades within a descending trend channel since the middle of June on the four-hour chart. That said, the path of least resistance for the AUD/JPY is to the upside as the cross just holds above the 50- and 100-hour Exponential Moving Averages (EMAs).

The immediate resistance level for AUD/JPY emerges at 94.40, highlighting the upper boundary of a descending trend channel. Any follow-through buying above the latter will see a rally to 94.90 (a high of August 15). The next upside stop to watch is 95.40 (high of July 14) en route to 95.85 (high of July 31).

Looking at the downside, the cross will meet the initial support level at 93.85 (the 50-hour EMA), followed by 93.75 (the 100-hour EMA). The next downside filter appears at 93.50 (low of August 22). The key contention level is seen near a psychological figure at 93.00. A break below the latter will see a drop to 92.60 (the midline of the descending trend channel) en route to 91.80 (the high of May 8) and finally at 91.35 (the lower limit of the descending trend channel).

It’s worth noting that the Relative Strength Index (RSI) holds above 50 and the Moving Average Convergence/Divergence (MACD) stands in the bullish territory. Both momentum indicators support the buyers for now