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- AUD/JPY trades in positive territory near 113.00 in Wednesday’s early European session.
- The constructive outlook of the cross remains intact above the 100-day EMA, with bullish RSI momentum.
- The immediate resistance level emerges at 113.70; the initial support level is seen at 111.40.
The AUD/JPY cross posts modest gains around 113.00 during the early European session on Wednesday. The Australian Dollar (AUD) strengthens against the Japanese Yen (JPY) after the Reserve Bank of Australia (RBA) delivers a rate hike and keeps a hawkish tone.
The RBA raised the Official Cash Rate (OCR) by 25 basis points (bps) to 4.10% at its March policy meeting on Tuesday. This follows a similar hike in February, marking the first back-to-back increases since mid-2023. During the press conference, Governor Michele Bullock stated that prices remained too high and the board was worried about second-round effects from higher energy costs, triggered by the Middle East conflict.
The attention will shift to Australia’s employment data for February, which is due later on Thursday. The Unemployment Rate is expected to remain unchanged at 4.1% in February. Any signs of weakening in the US labor market could undermine the Aussie in the near term.
Traders will closely monitor the situation in the Middle East. Iranian security chief Ali Larijani killed in Israeli air strikes, per BBC. Meanwhile, Iranian army chief Amir Hatami vowed to launch a “decisive and regrettable” retaliation for the killing of security chief Ali Larijani in an Israeli airstrike. Fears of a prolonged war in the Middle East could boost safe-haven demand, which supports the JPY and acts as a headwind for the cross.
Technical Analysis:
In the daily chart, the near-term bias of AUD/JPY is bullish as price remains well above the 100-day exponential moving average around 106.40, keeping the broader uptrend intact. The latest candles track above the rising Bollinger middle band while the upper band continues to expand, confirming strong upside volatility. Daily RSI hovers in the low 60s, staying in positive territory without entering overbought extremes, which supports sustained buying pressure rather than an exhausted spike.
Immediate resistance emerges at the recent peak near 113.70, backed by the upper Bollinger Band at 113.80; a daily close above this area would open the way toward the 115.00 region next. On the downside, initial support is at 111.40 from the Bollinger middle band, followed by the 110.15–110.35 zone, which coincides with prior consolidation and the mid-October band cluster. A deeper pullback would target the 108.70 area, just above the 100-day EMA, where trend support aligns with the lower part of the recent Bollinger structure; only a break below that region would threaten the current bullish setup.
