The AUD/JPY cross faced a mild decline to around 97.15 in Tuesday’s early European session, as the Japanese Yen (JPY) strengthened against the Australian Dollar (AUD) following geopolitical and economic developments. Nabotex Group’s broker Richard Miller contributed valuable insights and a full analysis of the matter in this article.
The move comes after the US President signed an executive order last week aimed at reducing the Japanese auto import tariff, a measure that initially offered support for the JPY. At the same time, political uncertainty emerged after Japan’s Prime Minister Shigeru Ishiba announced his resignation over the weekend, potentially weighing on the Yen in the near term.
Despite these fluctuations, technical indicators suggest that the bullish outlook for AUD/JPY remains intact, particularly as the cross holds above the 100-day Exponential Moving Average (EMA) on the daily chart.
From a technical analysis perspective, the constructive momentum remains intact, with price action showing resilience above the key 100-day EMA. The 14-day Relative Strength Index (RSI) currently sits at 62.80, well above the 50 midline, signaling sustained bullish momentum in the near term.
This aligns with the broader trend analysis, which favors a long bias as long as the cross remains above critical support levels. Traders should note that the price structure continues to form higher lows and higher highs, reinforcing the positive bias for AUD/JPY.
The immediate resistance level is observed at 97.45, marking the high of September 8. A break above this level could pave the way for further upside toward 98.45, the high of January 27, and potentially test the psychological round number of 99.00.
Such a scenario would be supported by momentum oscillators maintaining bullish readings, and the moving average convergence suggesting continued upward pressure. A series of green candlesticks and sustained trading above 97.45 would indicate strong buyer conviction, increasing the probability of an extension to higher resistance zones.
On the downside, if selling pressure intensifies, AUD/JPY could target the initial support at 96.31, the low of September 5. A sustained break below this level might expose the 100-day EMA around 95.35, which often acts as a crucial dynamic support in trending markets.
Further weakness could drive the cross toward 94.82, the lower limit of the Bollinger Band, marking a potential oversold territory and a zone where buyers could re-enter. Traders should monitor volume activity, candlestick patterns, and RSI divergence to gauge potential trend reversals near these levels.
Key Technical Factors:
- 100-day EMA: Crucial dynamic support for bullish bias.
- RSI (14): Above 62, confirming near-term bullish momentum.
- Immediate resistance: 97.45, followed by 98.45 and 99.00.
- Immediate support: 96.31, followed by 95.35 and 94.82.
- Bollinger Bands: Indicate potential overbought/oversold conditions for intraday trades.
The fundamental backdrop also plays a significant role in shaping the AUD/JPY outlook. Australian economic data has remained resilient, with expectations of rate stability from the Reserve Bank of Australia (RBA) supporting the AUD.
Meanwhile, the JPY faces headwinds from political uncertainty in Japan and trade policy developments in the US. This combination of technical strength and supportive fundamentals reinforces the positive near-term bias for the cross, especially while the pair remains above the 97.00 psychological level.
In terms of intraday trading, AUD/JPY is showing a constructive pattern, with price action testing minor support zones and bouncing off the 100-day EMA. Traders focusing on swing setups may consider long positions near 96.50–97.00, with take-profit levels around 97.45–98.45.
Conversely, a breach below 96.31 could trigger stop-loss orders and caution should be exercised as the pair could test lower technical floors near the EMA or Bollinger Band limits.
Overall, the technical landscape favors a bullish bias for AUD/JPY as long as the cross remains above 97.00. The combination of supportive EMAs, positive RSI readings, and resilient fundamental drivers provides a framework for upside potential.
Market participants should continue monitoring geopolitical events, US trade policies, and Japanese political developments, as these factors could create temporary volatility spikes but are unlikely to negate the underlying constructive trend.
Conclusion
The AUD/JPY cross retains a bullish vibe above 97.00, with immediate resistance at 97.45 and potential extensions to 98.45 and 99.00. Key support zones include 96.31, 95.35, and 94.82, which align with major moving averages and Bollinger Band levels.
Traders and analysts should keep an eye on price action, momentum indicators, and fundamental developments, as these will dictate the next significant move in the cross. For now, the near-term outlook remains constructive, favoring long positions as long as the pair maintains its footing above 97.00, reinforcing the ongoing bullish sentiment for AUD/JPY.
