AUD/JPY Price Forecast: Gains ground to near 114.50, bullish tone prevails above 100-day SMA

The AUD/JPY currency pair is currently trading near 114.45, up from the 100-day Simple Moving Average (SMA) and the 20-day Bollinger middle band, indicating a bullish trend. Recent positive Australian Consumer Price Index (CPI) data has bolstered expectations of a Reserve Bank of Australia (RBA) interest rate hike, with a 38% probability now assigned to a rate increase in September, up from 17% previously.

The Bank of Japan (BoJ) Deputy Governor Ryozo Himino emphasized the need for timely interest rate hikes amid rising inflation risks but refrained from providing explicit timing signals. Rabobank’s FX strategists suggest that if the BoJ hikes rates, the Ministry of Finance (MoF) may intervene in the market, potentially pushing USD/JPY to the 158-157 area over the next 3-6 months.

The AUD/JPY pair is approaching immediate resistance at the upper Bollinger Band around 115.00, and a break above this level could propel the pair to 115.50. Conversely, a break below the 100-day SMA at 113.20 could expose the 20-day Bollinger middle band near 112.55, with a deeper structural support level at the lower Bollinger Band around 110.15.

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