AUD/JPY Price Forecast: Strengthens above 110.00, while bearish technical bias persists
The AUD/JPY cross trades in positive territory near 110.20 during the early European trading hours on Tuesday. Traders await the speech from the Bank of Japan (BoJ) Governor Kazuo Ueda later on Tuesday for more clues on the interest rate outlook.
The AUD/JPY exchange rate is trading just above 110.20 early Tuesday in European trading hours. Analysts are watching for insights from the Bank of Japan (BoJ) Governor Kazuo Ueda during his upcoming speech later in the day. The BoJ may signal later this month that Japan's inflation has approached its 2% target, potentially prompting the central bank to resume raising interest rates.
However, some BoJ policymakers remain cautious about another rate increase this month, preferring to wait for more economic data and assess the impact of previous hikes on domestic financial conditions. Meanwhile, market sentiment favors a potential rate hike by the Reserve Bank of Australia (RBA) at its November meeting, with probability estimates around 20%.
Inflation data from Korea and Japan has kept market focus on underlying price pressures, despite diverging headline figures. Korea's consumer price index (CPI) inflation eased to 2.9% year-over-year in September, slightly below expectations, while Japan's headline CPI accelerated to 2.7% year-over-year, surpassing consensus and August's 1.9%.
The core Tokyo CPI, excluding fresh food and energy, rose to 3.0% year-over-year, the highest reading since the Takaichi administration. Technical analysis indicates that AUD/JPY holds a bearish near-term bias as the pair trades below key moving averages. The price remains under the 20-period simple moving average (Bollinger middle band) and the 100-day moving average, while the Relative Strength Index (14) around 40.8 suggests a neutral-to-soft range, hinting at selling pressure without oversold conditions.
Initial resistance lies near the Bollinger middle band at 110.60, with a stronger barrier at 112.15. A break above this level could pave the way for higher prices toward the 100-day moving average near 112.55. Conversely, support emerges at the psychological 110.00 level, followed by the lower Bollinger band at 109.10. A decisive break below this support could open the path for a deeper decline towards the October 1 low of 108.71.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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