AUD/JPY Price Forecast: Strengthens above 113.50 as bullish momentum persists above 100-day SMA

The AUD/JPY currency pair is trading near 113.55 in the early European session on Friday. Despite a slight dip in Australia's employment figures, the Australian Dollar continues to outperform the Japanese Yen. The Reserve Bank of Australia's upcoming meeting minutes are scheduled for release next Tuesday. The country's unemployment rate rose to 4.5% in July, up from 4.4% in June.

Meanwhile, employment fell by 15,800 jobs in July, down from the previous month's gain of 80,200. This weaker labor market has led financial markets to lower their expectations of further aggressive interest rate hikes by the RBA.

Analysts at Alpha Binwani Capital note that institutional investors are still positioning themselves in carry trades against a basket of G10 currencies, with the AUD leading the way. Some traders are beginning to reposition their bets against the Japanese Yen, as the impact of intervention has diminished. Standard Chartered analysts have revised their expectations for the Bank of Japan's next policy move, now anticipating a rate hike of 25 basis points on September 18, up from the previous October date.

This change suggests a more aggressive tightening schedule for Japan compared to earlier projections.

On the daily chart, AUD/JPY maintains a bullish bias, trading above the 100-day simple moving average and the Bollinger Bands' middle line. The Relative Strength Index (RSI) stands at 58.12, which is positive but below overbought levels, indicating sustained bullish momentum without signs of exhaustion. The next key resistance level is the July 22 high of 114.40, with the upper Bollinger Band at 114.75.

The psychological barrier at 115.00 could prompt profit-taking and short-term selling. On the downside, immediate support is at the 100-day SMA at 113.10, followed by the Bollinger middle band at 112.45. Further downside could expose the August 10 low of 111.63, and a deeper decline would test the lower Bollinger Band around 110.15.