AUD/JPY Technical Analysis: Hits 11-day high ahead of China data, sideways channel intact

AUD/JPY is currently trading at 79.07, the highest level since March 21, having hit a low of 78.80 earlier today.

Despite the quick recovery from session lows and a jump to 11-day highs, the outlook remains neutral as the two-month sideways channel is still intact. As of writing, the channel resistance is seen at 79.75, while the lower edge of the channel is located at 77.55.

The upper edge of the channel may come into play this week if China Caixin PMI manufacturing, due later today, beats estimates, triggering a rally in risk assets.

It is worth noting that the pair had gapped higher at 79.06, possibly in response to better-than-expected China NBS PMI manufacturing and non-manufacturing numbers released over the weekend.

Further, the drop to the session low of 78.80 was short-lived even though the National Australia Bank's business confidence index for March came in at the lowest level since January 2016. A better-than-expected business conditions index, which is widely considered as a more reliable and objective indicator, likely saved the day for the Aussie bulls. 

Daily chart

Trend: Neutral