AUD/JPY Price Forecast: Defends 200-day SMA below mid-109.00s after range breakdown

The AUD/JPY exchange rate faced a dip to around 109.40-109.35 at the beginning of a new week, with spot prices holding steady around the psychologically significant 110.00 mark during the first half of the European trading session. Despite a nearly 0.50% decline for the day, the Japanese Yen (JPY) maintained its relative strength due to joint US-Japan FX intervention and possible further interventions.

The Bank of Japan's (BoJ) commitment to raise interest rates adds support to the JPY, while the Reserve Bank of Australia (RBA) is likely to avoid an immediate rate hike, negatively impacting the Australian Dollar (AUD). The path of least resistance for the AUD/JPY pair appears to be bearish. Technical analysis indicates that a decline near the 111.25-111.15 region confirms the downward trend initiated by Friday's break of a four-month trading range.

The Moving Average Convergence Divergence (MACD) shows deeper negative territory, signaling lingering downside momentum. However, the daily Relative Strength Index (14) has entered oversold territory near 27, suggesting caution before attempting further losses. A break below the 200-day SMA at 109.25 could lead to a more pronounced bearish phase for the AUD/JPY pair.

Conversely, a recovery may face resistance near the 111.15-111.25 region, potentially triggering a short-covering move if cleared. Despite the broadly bearish technical outlook, traders should exercise caution before confirming a near-term bottom for the AUD/JPY pair, which had previously been near the 115.00 psychological mark.