AUD/USD technical analysis: Better bid, but breakout still elusive

• AUD/JPY is flashing green on US-China trade optimism. 
• A close above 72.73 is needed to confirm a bullish breakout. 

AUD/JPY is currently trading at 72.56, representing 0.40% gains on the day.

The currency pair picked up a bid near 72.00 after the news of a potential US-China currency pact hit the wires via Bloomberg, boosting demand for the risky assets like the AUD.

Even so, the pair failed to find acceptance above resistance at 72.73 – the upper edge of a falling channel represented by trendlines connecting Sept. 13 and Oct. 1 highs and Sept. 20 and Oct. 2 lows.

A close above 72.73 would confirm a bullish breakout and imply a resumption of the rally from the August lows below 70.00 and open the doors for a retest of recent highs near 74.50.

The outlook would turn bearish if the pair drops below Oct. 2's low of 71.73.

Daily chart

Trend: Bullish above 72.73

Technical levels