Australian Dollar versus Japanese Yen – Market Developments and Technical Context
The Australian Dollar (AUD) has maintained a bullish stance against the Japanese Yen (JPY) throughout the week, holding levels above 114.00 during early European trading sessions.
Recent Price Action
- On Friday, 24 July, the AUD/JPY pair rose to approximately 114.25, recovering from earlier intraday losses.
- The pair remained above the 100‑day simple moving average (SMA) and the 20‑day SMA associated with the Bollinger Bands, reinforcing the prevailing uptrend.
- The Relative Strength Index (RSI) was reported at 63, indicating firm upward momentum that is approaching overbought territory.
Resistance and Targets
- Immediate resistance is aligned with the upper Bollinger Band near 114.70.
- The first downside target has been identified at 113.55, while a more distant resistance level lies at 114.70.
Fundamental Drivers
- Australian employment data: The Australian Bureau of Statistics confirmed an unemployment rate of 4.4 % for June, matching consensus expectations, and an employment change of 76.3 k (up from 44 k in May). These figures support the AUD’s strength.
- Japanese policy stance: Finance Minister Satsuki Katayama announced readiness to act on currency shifts, signalling potential intervention if the yen weakens excessively. The Bank of Japan’s openness to faster tightening, combined with intervention rhetoric, has bolstered the yen.
- Inflation dynamics: Rising energy prices are increasing inflationary pressure in Japan, raising expectations for further rate hikes, which could further support the yen.
Technical Summary
The AUD/JPY cross remains in positive territory, anchored above key moving averages and exhibiting strong RSI momentum. The pair’s trajectory is likely to encounter the next resistance at 114.70, with a possible pullback toward 113.55. Continued support for the AUD is tied to Australian employment data, while Japanese intervention concerns and potential policy tightening will influence the yen’s strength.
