AUD/JPY Dips Below 114.50 After Weak Australian GDP, But Bullish Trend Holds

The AUD/JPY pair softened below the 114.50 mark during Wednesday’s Asian session following the release of weaker-than-expected Australian Gross Domestic Product (GDP) data. Despite the intraday pullback, the broader technical structure remains bullish, with the pair holding above key support levels that have underpinned the uptrend since late 2023.

Weaker GDP Triggers Modest Selling Pressure

Australia’s economy expanded by just 0.2% in the fourth quarter of 2024, falling short of the 0.4% forecast and marking the slowest quarterly growth in over a year. The data raised fresh concerns about domestic demand and consumer spending, prompting a mild sell-off in the Australian dollar against the Japanese yen.

The GDP miss reinforces expectations that the Reserve Bank of Australia (RBA) may keep its policy stance accommodative for longer, potentially delaying any rate normalization. This weighed on the Aussie, though the impact was contained as the yen also faced headwinds from ongoing dovish signals from the Bank of Japan (BoJ).

Technical Picture: Bullish Structure Intact

From a technical perspective, the AUD/JPY pair continues to trade above its 50-day and 100-day moving averages, both of which are sloping higher. The 113.80–114.00 zone, which acted as resistance in late January, has now turned into a critical support area. As long as prices remain above this region, the near-term bias stays bullish.

The Relative Strength Index (RSI) has dipped from overbought levels but remains above 50, suggesting the correction is healthy rather than a reversal. A decisive break above 115.00 would open the door toward the 115.80–116.00 resistance band, a level not seen since mid-2024.

What This Means for Traders

For traders, the current pullback offers a potential re-entry point for long positions, provided the pair holds above 114.00. A close below 113.50, however, would signal a deeper correction and could shift the short-term outlook to neutral.

Fundamentally, the divergence between the RBA’s cautious tone and the BoJ’s persistent dovishness continues to favor the Aussie over the yen. Until either central bank signals a clear policy shift, the broader trend is likely to remain supportive of AUD/JPY upside.

Conclusion

The AUD/JPY pair’s dip below 114.50 after soft Australian GDP data is a temporary setback within a still-intact bullish trend. Key support at 113.80–114.00 will determine whether the pair consolidates or resumes its advance. Traders should watch for a bounce from this zone as a confirmation of continued upward momentum.

FAQs

Q1: Why did AUD/JPY drop after the Australian GDP data?
The GDP growth of 0.2% missed the 0.4% forecast, raising concerns about the Australian economy and reducing expectations for RBA rate hikes, which weighed on the Australian dollar.

Q2: Is the AUD/JPY bullish trend still valid?
Yes. The pair remains above its key moving averages and the 113.80–114.00 support zone. The RSI is still above 50, indicating the uptrend is intact despite the short-term pullback.

Q3: What are the next key levels to watch for AUD/JPY?
Immediate resistance is at 115.00, followed by 115.80–116.00. On the downside, support is at 114.00 and then 113.50. A break below 113.50 would signal a deeper correction.