AUD/JPY Price Forecast: Gains Hold Above 113.50 as Bullish Trend Strengthens

The AUD/JPY currency pair is trading above the 113.50 level, maintaining a bullish trend that is underpinned by support from the 100-day simple moving average (SMA). As of the latest session, the pair shows continued buying interest, with traders closely watching the key technical level for signs of further upside momentum.

Technical Analysis: Bullish Bias Holds Above Key Moving Average

The 100-day SMA has acted as a reliable support level, reinforcing the bullish outlook for AUD/JPY. The pair’s ability to hold above this moving average suggests that the medium-term trend remains positive. Price action shows a series of higher lows, a classic indicator of sustained buying pressure. The next resistance zone is likely near the 114.00 round number, with a break above that potentially opening the path toward the 114.50 area.

Market Drivers and Implications

The Australian dollar has found support from relatively stable commodity prices and a cautious but positive risk appetite in global markets. On the other side, the Japanese yen remains under pressure as the Bank of Japan maintains its ultra-loose monetary policy stance, diverging from the hawkish tones of other major central banks. This policy divergence continues to favor the AUD/JPY pair. For traders, the current setup offers a clear risk-reward scenario: as long as the pair stays above the 100-day SMA, the bullish bias remains intact.

Why This Matters for Forex Traders

The AUD/JPY pair is a popular barometer for risk sentiment in the Asia-Pacific region. A sustained move above 113.50, backed by the 100-day SMA, signals that risk-on appetite is prevailing. This can influence trading strategies for related currency pairs and commodities. Understanding these technical levels helps traders set realistic entry and exit points, manage risk, and align their positions with the prevailing trend.

Conclusion

The AUD/JPY price forecast remains constructive as long as the pair holds above the 113.50 support and the 100-day SMA. The bullish trend is intact, but traders should monitor for any break below the moving average, which could signal a shift in sentiment. Current market conditions favor the upside, driven by policy divergence and stable risk appetite.

FAQs

Q1: What is the significance of the 100-day SMA for AUD/JPY?
The 100-day SMA is a widely watched technical indicator that smooths out price data over the past 100 days. For AUD/JPY, holding above this level confirms a medium-term bullish trend and acts as a dynamic support zone.

Q2: What are the key resistance levels to watch for AUD/JPY?
The immediate resistance is near the 114.00 psychological level. A break above that could target the 114.50 area, which represents a previous swing high.

Q3: How does the Bank of Japan’s policy affect AUD/JPY?
The Bank of Japan’s ultra-loose monetary policy weakens the yen, making AUD/JPY more attractive for carry trades. This policy divergence is a key fundamental driver supporting the pair’s recent gains.