AUD/JPY Holds Gains Near 112.00, But Bearish Pressure Persists Below Key Moving Averages

The AUD/JPY currency pair is holding onto modest gains near the 112.00 level during early trading sessions, but the broader technical outlook remains tilted to the downside as the pair continues to trade below several key moving averages. Traders are closely watching for a decisive breakout or breakdown to confirm the next directional move.

Technical Picture: Resistance Holds Firm Below Moving Averages

The pair has struggled to reclaim ground above the 50-day, 100-day, and 200-day simple moving averages (SMAs), which are now acting as a formidable resistance cluster in the 112.50–113.00 zone. This technical ceiling has repeatedly capped upside attempts over the past two weeks, reinforcing the bearish bias. The 14-day relative strength index (RSI) remains below the 50-midpoint, suggesting that selling pressure is still dominant, though it has edged slightly higher from oversold territory.

Support Levels and Key Triggers to Watch

On the downside, immediate support is seen near the 111.50 level, a recent swing low. A break below that could open the door toward the 111.00 psychological handle and then the 110.50 region, which marked a multi-month low earlier this year. Conversely, a sustained move above the 112.50 resistance zone would be needed to shift the near-term bias back to neutral or bullish. The next major upside target would then be the 113.00 area.

What’s Driving the Pair?

The Australian Dollar remains sensitive to risk sentiment and commodity price movements, while the Japanese Yen continues to draw support from safe-haven flows amid global economic uncertainty and cautious commentary from the Bank of Japan. Diverging monetary policy expectations between the Reserve Bank of Australia and the Bank of Japan are also contributing to the pair’s range-bound behavior. The RBA has signaled a cautious approach to further rate hikes, while the BoJ is slowly moving away from its ultra-loose stance, which has historically weighed on AUD/JPY.

Conclusion

AUD/JPY is at a technical crossroads. While the pair has stabilized above the 112.00 mark in the short term, the inability to break above key moving averages keeps the bearish scenario alive. Traders should monitor a close above 112.50 for a potential shift in momentum, or a break below 111.50 for confirmation of further downside. Until then, the path of least resistance remains lower.

FAQs

Q1: Why is the AUD/JPY pair considered bearish despite holding near 112.00?
The pair remains below its 50-, 100-, and 200-day moving averages, which typically indicate a downtrend. The RSI is also below 50, confirming bearish momentum.

Q2: What are the key resistance levels for AUD/JPY?
The immediate resistance zone is between 112.50 and 113.00, which includes the cluster of moving averages. A break above this area is needed to invalidate the bearish view.

Q3: How do central bank policies affect AUD/JPY?
The Reserve Bank of Australia’s cautious stance and the Bank of Japan’s gradual tightening create a policy divergence that often influences the pair. A more hawkish BoJ tends to support the Yen, weighing on AUD/JPY.