Sterling Falls Against Yen on Political, Risk Concerns

Key Moments

Spot Market Overview

AUD/JPY came under pressure near 114.00 in Friday’s early Asian session as sellers emerged at higher levels. Despite the intraday retreat, the cross maintained a constructive tone while trading above its 100-day Exponential Moving Average and with the Relative Strength Index (RSI) still indicating bullish momentum. From a short-term perspective, the first resistance level highlighted was 114.95, with immediate support identified at 113.80.

During the early European session on Friday, the pair remained in negative territory around 114.00. The Australian Dollar (AUD), often treated as a proxy for China-related sentiment, weakened against the Japanese Yen (JPY) amid a lack of progress in efforts to open the Strait of Hormuz.

US President Donald Trump stated that he had struck “fantastic trade deals” with Chinese President Xi Jinping as he concluded his visit to Beijing on Friday. On the Iran front, Trump said, “We’ve settled a lot of different problems that other people wouldn’t have been able to solve.” Nevertheless, uncertainty remained elevated, and market participants were expected to closely monitor the second day of a high-stakes summit between Trump and Xi Jinping for further clarity.

Technical Outlook for AUD/JPY

On the daily chart, AUD/JPY continued to show a positive near-term bias as price action held above both the 100-day Simple Moving Average (SMA) and the middle line of the Bollinger Bands. The pair traded in the upper half of its recent volatility range, with the upper Bollinger Band positioned just overhead. The RSI hovered around 57, pointing to ongoing, but not extreme, upside momentum.

On the upside, the immediate resistance level was aligned with the upper Bollinger Band near 114.95. A decisive daily close above that area would indicate scope for an additional bullish extension. On the downside, initial support was seen at the middle Bollinger Band around 113.80. Below that, the next support zone was located at the lower Bollinger Band near 112.65, while the 100-day SMA at 110.27 marked a more significant trend-support area should a broader corrective phase develop.