AUD/JPY Technical Analysis: Dips below 80.00 after RBA minutes, channel breakout still valid

The offered tone around the Aussie dollar has strengthened, pushing the AUD/JPY cross to a fresh session low of 79.95.  

The Australian currency has come under pressure in the last few minutes, possibly due to the dovish Reserve Bank of Australia's (RBA) April meeting minutes. 

The central bank's monetary policy board is open to cutting rates if inflation remains weak and the labor market loses strength, the minutes showed. Further, with subdued price pressures, the board saw low odds of a near-term rate rise. Clearly, the board looks to be preparing markets for a potential rate cut in the second half of this year. 

While the RBA's dovish stance is AUD-negative, technical studies and the daily chart in particular, is calling a bullish move in the AUD/JPY cross. 

Daily chart

• The bullish view put forward by the channel breakout on Friday will remain valid as long as the pair is held above 79.70. Also, with the 5- and 10-day MAs trending north, the path of least resistance appears to be on the higher side. 
• A strong bounce from the 5-day MA, currently at 79.76 or 79.70 (upper edge of the channel), if followed by a move above 80.49 (Friday's high), would solidify the channel breakout, opening the doors to levels above 81.00. 
• A close below 79.70 would neutralize the bullish setup. 

Trend: Cautiously bullish