AUDJPY just hit resistance at the descending channel and area of interest previously marked and seems ready to resume its slide. Applying the Fib extension tool on the latest correction shows the next potential downside targets.

The 38.2% extension lines up with the mid-channel area of interest around the 79.50 minor psychological mark and could be the closest take-profit point for sellers. Stronger selling pressure could take it down to the swing low at the 61.8% extension or 78.75 mark. From there, sustained bearish momentum could lead to a test of the channel support at the 78.6% extension or a drop all the way to the full extension at 77.60.

The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. The 100 SMA also seems to have held as dynamic resistance while the 200 SMA lines up with the channel top to add to its strength as a ceiling in another pop higher.

RSI is pointing down to confirm that sellers are in control of the game. The oscillator has plenty of room to head south so AUDJPY could follow suit. Similarly stochastic is also heading lower to signal that bearish pressure is present.

Expectations of another round of tariffs from the US to China are weighing on market sentiment, particularly the Aussie as commodity exports could take hits. At the same time, risk-off moves also weigh on the higher-yielding currencies while lifting the lower-yielding yen.

The BOJ decision could be an event risk this week, though, as any indication that easier monetary policy could be maintained might mean losses for the Japanese currency. The RBA minutes are up for release too, and these might shed some light on future policy changes.