The AUD/JPY pair is picking up steam around 113.30 during Thursday’s European trading session. The Australian dollar has seen a slight increase against the Japanese yen, likely thanks to a more optimistic outlook after news surfaced about potential peace talks between the U.S. and Iran to conclude the ongoing conflict.
According to officials, Iran is currently reviewing a U.S. proposal aimed at establishing a formal end to the war, although some critical demands related to Iran’s nuclear activities and the reopening of the Strait of Hormuz remain unresolved. Reports indicate that Iran plans to communicate its feedback on this proposal to a mediator on Thursday.
Despite this positive momentum, there are some worries about possible interventions that might cap the pair’s upward movement. Market fluctuations have heightened amid speculation that Japanese authorities may step in to bolster the yen. Jun Mimura, Japan’s top foreign exchange official, mentioned on Thursday that he would be keeping a close eye on the FX market but refrained from discussing any specific interventions or currency levels.
Technical analysis:
From a daily perspective, the AUD/JPY is trading above the 100-day exponential moving average (EMA), which supports the ongoing uptrend and suggests a cautiously positive outlook. The Relative Strength Index (14) hovering near 53 indicates some momentum, although it doesn’t appear strong enough for an imminent breakout.
Looking at potential barriers, initial resistance sits at the Bollinger 20-day middle band around 113.60. The next significant resistance could be at the high of 114.32 from May 6, and if upward movement continues, a further barrier emerges at 114.82. On the downside, initial support is expected at 112.40, followed by the April 30 low of 111.33. A noteworthy level is the 100-day EMA at 109.60; while the broader bullish trend seems likely to hold, a deeper pullback could attract buying interest.
