AUD/JPY keeps gains after an above-forecast of China services PMI

• A better-than-expected China services PMI is a welcome signal for the AUD.
• The AUD/JPY is struggling to cut through the key falling trendline.

China services PMI reading for September bettered estimates, but is not helping the AUD/JPY pair cross key technical hurdle.

At press time, the currency pair is trading at 80.35, having bounced off the psychological support of 80.00 on Friday.

The Caixin/Markit services purchasing managers' index (PMI) rose to a three-month high of 53.1 in September from 51.5 in August. The actual reading also bettered the estimate of 51.5.

Still, the pair is struggling to beat the trendline sloping downwards from the Oct. 2 high and Oct. 5 high. As of writing, the trendline resistance is seen at 80.38.

Looking forward, the currency pair could cut through the trendline hurdle if the European equities trade on the offensive in response to China's decision to cut the reserve requirement ratio by 100 basis points.

AUD/JPY Technical Levels

Resistance: 80.38 (trendline resistance), 80.59 (100-hour exponential moving average), 10.77 (resistance of Oct. 4 on the hourly chart)

Support: 80.00 (psychological support), 79.70 (mid-August low), 79.59 (76.4% Fib R of 78.68/82.51)