Key Moments
- AUD/JPY trades around 111.25 in early European dealings on Friday as bearish momentum continues.
- Tokyo CPI rises for the first time in eight months, supporting expectations for further BOJ rate hikes and a stronger JPY.
- Key technical levels cluster at resistance near 112.25 and support around 111.15 on the daily chart.
Spot Market Overview
The AUD/JPY cross is trading lower around 111.25 during early European hours on Friday, extending its recent decline. The Japanese Yen (JPY) is gaining ground against the Australian Dollar (AUD) after Tokyo’s Consumer Price Index (CPI) inflation accelerated for the first time in eight months, reinforcing expectations that the Bank of Japan (BOJ) could continue lifting interest rates.
Market participants are also closely monitoring the risk of official intervention in the foreign exchange market, a factor that could add further support to the Yen and limit any recovery in AUD/JPY. Japan’s Chief Cabinet Secretary Minoru Kihara said on Tuesday that he will take appropriate action against the foreign exchange moves if needed.
Technical Picture: Bearish Tone Dominates
On the daily chart, AUD/JPY maintains a negative near-term bias, with the price holding below both the 100-day moving average (MA) and the 20-period Bollinger middle band. The pair is moving toward the 20-period Bollinger lower band, which is acting as immediate support, while the Relative Strength Index (14) stands at 34.18, hovering just above oversold territory. This indicates that selling pressure remains in control, although the move may be becoming stretched.
| Technical Level | Indicator / Description | Value / Zone |
|---|---|---|
| Spot price | Early European session trading | Around 111.25 |
| Immediate resistance | 100-day moving average | 112.25 |
| Next resistance | 20-period Bollinger middle band | 112.95 |
| Upper resistance zone | Upper Bollinger band | Near 114.77 |
| Initial support | 20-period Bollinger lower band | Around 111.15 |
On the upside, a firm daily close above the 100-day MA at 112.25 would be needed to signal that selling pressure is easing and to expose the next resistance at the Bollinger middle band near 112.95. Beyond that, the upper Bollinger band around 114.77 represents a more distant ceiling.
On the downside, the first notable structural support sits at the Bollinger lower band around 111.15. A clear break beneath this level would signal scope for a deeper corrective downturn, while a hold above it could prompt a short-lived rebound back toward the nearby cluster of moving averages.
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