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AUD/JPY Softens near 104.00 amid intervention fears, broader uptrend prevails
- AUD/JPY softens to around 104.05 in Tuesday’s early European session.
- The cross keeps the upward bias above the key 100-day EMA, with the bullish RSI momentum.
- The immediate resistance level to watch is 104.74; the first support level is seen at 102.82.
The AUD/JPY cross attracts some sellers near 104.05 during the early European session on Tuesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) amid the intervention fears. Japan’s Finance Minister Satsuki Katayama said on Tuesday that the official has a free hand in dealing with excessive moves in the Japanese Yen (JPY).
Earlier on Monday, Japan’s top foreign exchange (FX) official, Atsushi Mimura, stated that recent foreign exchange moves were one-sided and sharp. Mimura added that he is concerned about the FX move and the government will take appropriate action against excessive actions.
Nonetheless, a hawkish hold narrative from the Reserve Bank of Australia (RBA) might help limit the Aussie’s losses. The RBA minutes from its December meeting indicated a growing concern that inflation may be more persistent than previously expected, leading the board to discuss the potential need for an interest rate hike next year.
Technical Analysis:
In the daily chart, AUD/JPY trades at 104.06. Price remains well above the rising 100-day EMA at 99.64, reinforcing the broader uptrend. The average has been grinding higher for weeks, keeping the bullish bias intact. RSI at 63.03 holds above the neutral 50 mark, with momentum cooled from earlier overbought readings yet still supportive. Price stands above the Bollinger middle band at 103.09 and leans toward the upper band at 104.74 as the bands contract, signaling reduced volatility. A decisive close through the upper band could pave the way to the 105.00 psychological level.
The December 19 low of 102.82 acts as an initial contention level for the cross. Bollinger Bands continue to narrow, with the lower band rising to 101.44 and providing dynamic support as the trend matures. A rejection from the upper band would keep AUD/JPY consolidating back toward 101.44, while sustained strength above the band would extend the advance in line with the prevailing uptrend.
