AUD/JPY support test: Technical outlook

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Australian Dollar vs Yen down 0.5%

Highlights

The Reserve Bank of Australia raised its policy rate by 25 basis points to 4.6%, increasing the Australian Dollar's yield advantage over the Yen.
This rate hike enhances Australian asset appeal for investors by widening interest rate differentials and structurally supports AUD/JPY valuations.
AUD/JPY trades below key moving averages with bearish pressure dominant; next 2 to 3 days likely confined to ¥109.34 to ¥110.53, with a 75% probability of further downside.

Rate hike boosts yield differential as RBA tightens policy

The Reserve Bank of Australia raised its key interest rate by 25 basis points to 4.6%, increasing the yield advantage of the Australian Dollar over the Japanese Yen, according to Fxstreet. This adjustment in monetary policy tends to make Australian assets more appealing to investors by enhancing rate differentials. As a result, the move offers structural support to the pair and highlights the direct impact of central bank actions on currency valuation.

Divergent technical signals amid downside bias and mixed momentum

On the technical front, AUD/JPY trades below the MA-20, MA-50, and remains significantly under the MA-200, underscoring a multi-timeframe downside structure. Immediate resistance is marked by the Ichimoku Kijun at ¥110.39, while key support is defined at ¥109.34. Momentum metrics are mixed: the MACD signals a strong sell, while the ADX points to buy, revealing divergence between trend direction and strength. Oscillators including the RSI, CCI, and Bull/Bear Power favor buyers, contrasting with Stoch RSI showing overbought conditions and a neutral Awesome Oscillator. Today’s price action is characterized by subdued volatility near intraday lows.

Range-bound trading likely as muted volatility contains risks

Looking ahead over the next two to three trading days, the most likely scenario is that AUD/JPY holds within a narrow range of ¥109.34–¥110.53, mirroring recent muted volatility. There is a 75% probability of another move lower within this band and only a 25% chance of a break higher. A bullish breakout would depend on a sustained move above resistance at ¥110.39, while a bearish outcome would involve a close below ¥109.34, potentially opening the door to fresh lows.

Anton Kharitonov, expert at Traders Union, sees AUD/JPY as weighed down by both technical and fundamental factors. Despite recent RBA rate action, the pair remains below key moving averages and momentum signals are mixed. Downside risk dominates unless resistance at ¥110.39 is clearly broken. "With structural pressure still in place, I remain cautious and see little reason to chase upside unless key levels are reclaimed."

Earlier, analysts noted that AUD/JPY faced persistent downside momentum due to entrenched technical weakness. The recent RBA rate hike introduces a potential shift in fundamental dynamics, but with mixed technical signals, traders should closely monitor the ¥110.39 resistance and ¥109.34 support for signs of a decisive move outside the prevailing consolidation band.

Source of Data: AUD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.