AUD/JPY Peaks at 101.66, Marks Five-Session Gain

Key Points

• AUD/JPY hits a five-month high at 101.66, indicating sustained upward momentum with RSI above 50.
• Support at 101.00 and 100.00, with resistance eyed at 102.00.
• RBA adopts a hawkish stance, delaying rate cuts, while BoJ remains conservative with rates at 0%.

The AUD/JPY currency pair has recently witnessed a notable uptrend, achieving five consecutive sessions of gains. This steady climb peaked at a fresh five-month high of 101.66, settling slightly lower at 101.50. Such momentum is underscored by a robust 14-day Relative Strength Index (RSI), persistently holding above 50, suggesting that the upward momentum might be sustained over the short term.

AUD/JPY: Key Support at 101.00, Resistance at 102.00

Regarding technical landscapes, AUD/JPY is surrounded by multiple layers of support and resistance that frame its trading boundaries. Immediate support is found at 101.00, followed closely by a significant psychological level at 100.00. Furthermore, additional support is provided by the 21-day Exponential Moving Average (EMA) and the lower channel boundary, marked at 99.87 and 99.00, respectively. On the flip side, the pair faces immediate resistance at 102.00, a level traders will watch closely if the pair’s ascent continues.

RBA Postpones Rate Cut, BoJ Holds Rates at 0%

Turning to the monetary landscape, the Reserve Bank of Australia (RBA) adopts a hawkish stance. Consequently, it has postponed rate cut expectations from November 2024 to February 2025. This adjustment reflects a proactive approach to sustaining economic growth and managing inflation, thus influencing the strength of the Australian dollar. Conversely, the Bank of Japan (BoJ) maintains its interest rate at 0%, marking stability after its first rate increase since 2007. Japan’s inflation metrics, particularly the Tokyo Consumer Price Index (CPI), remain subdued and well below the 2% target, contributing to the BoJ’s conservative position.

Australian CPI Surges, Bond Yield Hits 4.59%

From an economic data perspective, Australia’s recent Consumer Price Index (CPI) report exceeded expectations last Wednesday. Consequently, this has driven Australian government bond yields to a 21-week high of 4.59%. This indicates higher investor confidence in the Australian economy and its currency. On the other hand, Japan’s CPI data showed underperformance, aligning with a more cautious approach from investors towards the yen.

Trading AUD/JPY: Economic Indicators Shape Market

For traders, the contrast between Australia’s strong economy and Japan’s cautious inflation paints a compelling story for AUD/JPY. Analyzing support and resistance, contrasting monetary policies, and economic performances creates a strategic framework to anticipate future movements. Keeping abreast of these developments will be crucial for those looking to navigate the complexities of this currency pair effectively.