Key Moments
- AUD/JPY traded lower around 112.62 during early European hours on Thursday while still maintaining an overall constructive uptrend structure.
- Market participants remained focused on potential Japanese official intervention as the Yen strengthened amid heightened Middle East tensions.
- Key technical levels included support at 112.55 and 112.42, with resistance levels at 113.55, 113.70, and 114.74.
Spot Price Action and Market Drivers
The AUD/JPY cross traded in negative territory near 112.62 in early European dealings on Thursday. The Japanese Yen (JPY) gained ground against the Australian Dollar (AUD) as geopolitical tensions in the Middle East escalated following comments from US President Donald Trump that an interim agreement to end the war with Iran was “over.”
Traders stayed alert to the risk of direct action by Japanese authorities. “The yen’s current weakness is excessive and fails to reflect the strong fundamentals of the Japanese economy, a misalignment that could prompt major central banks to launch coordinated intervention,” said Michael Nizard, head of multi-asset and overlay at Edmond de Rothschild Asset Management.
Technical Setup: Trend Still Positive Despite Pullback
On the daily chart, AUD/JPY continued to trade above the 100-day moving average (MA) and the 20-day simple moving average (SMA) of the Bollinger Bands. This alignment pointed to a still-bullish overarching trend following the latest correction. Price also held clearly above the lower Bollinger band, while the upper band acted as the next upside reference as the pair attempted to extend higher. The 14-day Relative Strength Index (RSI) hovered close to the 50 mark, indicating neutral momentum and suggesting consolidation rather than a trend reversal.
Key Technical Levels
Immediate support was identified at the 100-day MA around 112.55. Below that, the Bollinger midline, located near 112.42, and the lower Bollinger band at 111.15 were seen as additional downside cushions where buyers were expected to defend the broader uptrend.
On the topside, the first resistance level was the June 16 high at 113.55. The next obstacle appeared at the upper Bollinger band near 113.70, ahead of the May 13 peak at 114.74.
| Level | Type | Price |
|---|---|---|
| Initial support | 100-day MA | 112.55 |
| Secondary support | Bollinger midline | 112.42 |
| Deeper support | Lower Bollinger band | 111.15 |
| First resistance | June 16 high | 113.55 |
| Next resistance | Upper Bollinger band | 113.70 |
| Further upside target | May 13 high | 114.74 |
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