AUD/JPY Price Forecast: Pair Strengthens Above 114.00, Bullish Bias Holds Above Key Support

The Australian dollar strengthened against the Japanese yen on Wednesday, with the AUD/JPY pair trading decisively above the 114.00 psychological level. The move extends a recent bullish run that has seen the cross gain traction since mid-February, supported by diverging monetary policy expectations and a risk-on tilt in broader markets.

Technical Setup: Bullish Bias Intact

From a technical perspective, the pair has held above a key support zone near 113.50, which aligns with the 20-day simple moving average. The 114.00 handle now acts as near-term support, while resistance is seen at the February high around 114.80. The relative strength index (RSI) remains in bullish territory near 58, suggesting room for further upside before reaching overbought conditions.

The bullish bias is reinforced by the 50-day moving average, which continues to slope higher above the 200-day average — a classic golden cross formation that typically signals sustained upward momentum. A daily close above 114.50 would open the door toward the 115.00 psychological barrier.

Fundamental Drivers: Divergent Policy Paths

The Australian dollar has found support from the Reserve Bank of Australia’s hawkish stance, with markets pricing in a higher terminal cash rate compared to earlier expectations. Meanwhile, the Bank of Japan remains committed to its ultra-loose monetary policy, keeping the yen under broad pressure. This policy divergence has been a primary driver for the AUD/JPY pair’s recent rally.

Risk Sentiment and Commodity Prices

Improved risk appetite, supported by a stabilization in Chinese economic data and firmer commodity prices, has further boosted the Aussie. As a proxy for global growth and commodity demand, the Australian dollar tends to benefit during periods of optimism. Conversely, any deterioration in risk sentiment or a sharp drop in iron ore prices could cap gains.

Key Levels to Watch

• Support: 114.00 (psychological), 113.50 (20-day SMA), 113.00 (round number)
• Resistance: 114.80 (February high), 115.00 (psychological), 115.50 (multi-month high)

Conclusion

The AUD/JPY pair maintains a constructive technical outlook above 114.00, supported by favorable fundamentals and a bullish moving average structure. Traders should monitor the 114.50–114.80 zone for a potential breakout, while a break below 113.50 would signal a loss of near-term momentum. As always, risk management remains key given the pair’s sensitivity to shifts in global risk appetite and central bank rhetoric.

FAQs

Q1: What does AUD/JPY breaking above 114.00 mean for traders?
A break above 114.00 suggests renewed bullish momentum, with the level now acting as support. Traders often view this as a signal to look for long positions, targeting the next resistance near 114.80 or 115.00.

Q2: Why is the AUD/JPY pair rising?
The rise is driven by the policy divergence between the hawkish RBA and the dovish BOJ, along with improved risk sentiment and higher commodity prices supporting the Australian dollar.

Q3: What are the key support levels for AUD/JPY?
Key support levels include 114.00 (psychological), 113.50 (20-day SMA), and 113.00 (round number). A sustained break below 113.50 would weaken the bullish bias.