The AUD/JPY currency pair has seen a decline, trading near the 100.00 level in early Asian trading on Friday, down 0.50% for the day. Despite this drop, the pair maintains a bullish sentiment as it remains above the crucial 100-period Exponential Moving Average (EMA). However, the Relative Strength Index (RSI) hints at neutral momentum, signaling that further upward movement may be limited. The immediate resistance is identified at 100.73, while the key psychological support level is seen at 99.00.
As the AUD/JPY falls further, the Japanese Yen is strengthening against the Australian Dollar, largely influenced by statements from Japanese government officials. The new economy minister has emphasized that any adjustments to the Bank of Japan’s monetary policy should align with the overarching objective of ending deflation. Concurrently, Japan’s Chief Cabinet Secretary has indicated that the new Prime Minister has mandated the preparation of a comprehensive economic package, with plans to present a supplementary budget to Parliament after the upcoming lower house elections.
Looking at the technical aspects, the sustained positive outlook for the AUD/JPY pair is noted as it holds its position above the 100-period EMA. Nonetheless, traders should remain cautious as the RSI’s position around the midline suggests potential consolidation. Should prices break the immediate resistance point of 100.73, the next significant resistance level is positioned at 101.35, which aligns with the upper boundary of the Bollinger Band. Moreover, the psychological resistance at 102.00 will be a critical watchpoint for bullish traders.
On the downside, if selling pressure pushes the pair below the 99.00 level, it could lead to further declines, targeting the 98.45-98.65 range, which encompasses the 100-period EMA and the lower boundary of the Bollinger Band. An extended drop beyond this could see the AUD/JPY approaching the next support level at 97.63, a previous low recorded on September 23.
