AUD/JPY Price Forecast: Pair Slips Below 113.00 But Bullish Structure Holds

The AUD/JPY currency pair edged lower during Thursday’s Asian session, slipping below the 113.00 psychological handle. Despite the intraday pullback, the broader technical structure continues to favor buyers, with the pair holding above key support levels that have underpinned the recent uptrend.

Technical Overview: Pullback Within a Bullish Framework

AUD/JPY has been in a steady recovery phase since late March, when it found support near the 108.50 zone. The pair rallied through the 112.00 resistance earlier this month, eventually testing the 113.50 region before the current consolidation. Thursday’s dip below 113.00 appears to be a routine correction within a still-intact bullish channel.

The Relative Strength Index (RSI) on the daily chart has eased from overbought levels above 70 to around 63, suggesting the pair is shaking off excessive bullish momentum rather than reversing trend. This kind of technical reset often provides a healthier foundation for the next leg higher.

Key Levels to Watch

Immediate support rests at 112.60, the 20-day simple moving average, followed by the 112.00 round number. A sustained break below 112.00 would put the bullish thesis under pressure, potentially opening a path toward 111.20. On the upside, resistance stands at 113.50, the recent swing high, with a close above that level targeting the 114.00 handle and beyond.

Traders should monitor the 112.60-113.00 zone closely. A bounce from this area would confirm that dip buyers remain active and that the uptrend retains its momentum.

What’s Driving AUD/JPY?

The Australian dollar has drawn support from resilient domestic employment data and the Reserve Bank of Australia’s hawkish rhetoric. The RBA has signaled that rate cuts are unlikely in the near term, which bolsters the yield appeal of the Aussie. Meanwhile, the Japanese yen remains under pressure as the Bank of Japan maintains its ultra-loose monetary policy stance, keeping the interest rate differential firmly in favor of the Australian dollar.

Risk appetite in broader financial markets has also been supportive. Equity markets in Asia have held firm, and commodity prices — particularly iron ore and coal, key Australian exports — have remained elevated. These factors collectively underpin the AUD/JPY bullish bias.

Conclusion

The AUD/JPY pullback below 113.00 is a natural consolidation within a broader uptrend. The technical setup remains constructive as long as the pair holds above the 112.60 support zone. Traders should watch for a bounce from current levels as confirmation that the bullish momentum is intact. A break below 112.00 would warrant caution and a reassessment of the near-term outlook.

FAQs

Q1: Is the AUD/JPY uptrend still valid after the dip below 113.00?
Yes, the broader uptrend remains intact. The pullback is a healthy correction within a bullish channel, and the pair is still above key support levels like the 20-day moving average at 112.60.

Q2: What are the key support and resistance levels for AUD/JPY?
Immediate support is at 112.60 and then 112.00. On the upside, resistance is at 113.50 and then 114.00. A break above 113.50 would signal renewed bullish momentum.

Q3: What factors are driving the Australian dollar higher against the yen?
The Australian dollar is supported by the RBA’s hawkish stance, strong domestic employment data, elevated commodity prices, and a risk-on mood in global markets. Meanwhile, the yen is weighed down by the Bank of Japan’s ultra-loose monetary policy.