The AUD/JPY currency pair is experiencing a bullish trend, with prices currently trading near 114.65 in the early European session. This positive movement is closely tied to the highly anticipated summit between US President Donald Trump and Chinese President Xi Jinping in Beijing. The summit's outcome will significantly impact the currency markets, as traders eagerly await the results. The meeting comes amidst reports of Xi Jinping's assurance to US CEOs that China's doors will remain open, offering more opportunities for American businesses. This sentiment aligns with Trump's stated intention to request China's 'opening up' during the summit. The technical analysis of the AUD/JPY chart reveals a constructive bullish bias, with prices holding above the 100-day Simple Moving Average (SMA) and the Bollinger middle band. The Relative Strength Index (RSI) is currently in the bullish territory, indicating that buyers are still in control, although there is room for consolidation. Immediate resistance is expected near 115.00, and a daily close above this level could trigger further gains. On the other hand, support levels are identified at 114.02 and 113.80, with the 100-day SMA at 110.18 serving as a deeper structural floor. The Japanese Yen, a highly traded currency, is influenced by various factors, including the Bank of Japan's (BoJ) policy, the differential between Japanese and US bond yields, and risk sentiment among traders. The BoJ's ultra-loose monetary policy between 2013 and 2024 led to the Yen's depreciation against major currencies due to policy divergence. However, the recent unwinding of this policy has provided some support to the Yen. The Yen is also considered a safe-haven investment, meaning it tends to strengthen during market stress as investors seek reliable and stable assets. As the AUD/JPY pair continues to gather strength, the upcoming summit between Trump and Xi will be a pivotal event, potentially impacting the currency's trajectory and the broader market dynamics.
