Key Moments
- AUD/JPY trades around 114.25 in early European hours on Friday, supported by robust Australian employment data for June.
- Australia’s June Employment Change printed at 76.3K, well above the 15K forecast and a revised 44K gain in May, while the Unemployment Rate remained at 4.4%.
- Despite the bullish technical setup, Japanese authorities’ warnings about potential FX intervention and historically weak July-August seasonality pose risks to further AUD/JPY gains.
Spot Market Overview
The AUD/JPY cross is trading in positive territory around 114.25 during early European trading on Friday, extending its recent advance. The Australian Dollar (AUD) is gaining against the Japanese Yen (JPY) following a stronger-than-expected Australian labor market report for June.
Data from the Australian Bureau of Statistics (ABS) showed that Australia’s Unemployment Rate held at 4.4% in June, matching market expectations. At the same time, Employment Change rose by 76.3K in June, compared with a 44K increase in May (revised from 40.3K) and well above the projected 15K rise, providing fundamental support for the AUD.
Policy Intervention Risk Supports JPY
Upside momentum in AUD/JPY may be constrained by the prospect of official action from Tokyo. Concerns about potential currency intervention by Japanese authorities continue to underpin the Yen.
Japan’s Finance Minister Satsuki Katayama stated on Friday that officials are prepared to respond to currency movements if needed. Katayama emphasized that authorities stand ready to take “decisive steps” in the foreign-exchange market, signaling a willingness to counter excessive volatility in the JPY.
Technical Setup: Bullish Trend Above Key Moving Averages
On the daily chart, AUD/JPY maintains a constructive bias, with price action holding clearly above the 100-day simple moving average (SMA) and the 20-day SMA of the Bollinger Bands, preserving the broader uptrend structure.
The Relative Strength Index (RSI) stands at 63, indicating solid positive momentum and edging closer to overbought territory. This suggests that while buyers are still in control, additional gains could slow as the pair approaches key resistance levels.
| Technical Level | Type | Level |
|---|---|---|
| Immediate resistance | Bollinger upper band | 114.70 |
| Next resistance | June 2 high | 114.92 |
| Initial support | June 16 high | 113.55 |
| Support zone | Bollinger middle band | 112.95 |
| Support zone | 100-day SMA | 112.85 |
| Deeper downside target | Lower Bollinger band | 111.22 |
On the topside, the first hurdle is located near the Bollinger upper band around 114.70. A clear break above this band would expose the June 2 peak at 114.92 as the next upside objective.
On the downside, initial support is identified at the June 16 high of 113.55. Below that, focus shifts to the Bollinger middle band at 112.95, followed closely by the 100-day SMA at 112.85. A sustained move under this clustered support area would indicate scope for a deeper pullback toward the lower Bollinger band around 111.22.
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