The AUD/JPY exchange rate hovered around 114.10 during the early part of Wednesday’s European session. Traders appear to be adopting a wait-and-see attitude leading up to a meeting between U.S. President Trump and Chinese President Xi Jinping in Beijing, set for Thursday and Friday. Any positive outcomes from that summit could potentially benefit Australia as a proxy for China.
Moreover, the Reserve Bank of Australia’s (RBA) somewhat hawkish stance on monetary policy might lend support to the Australian dollar (AUD). Economists at HSBC noted, “While we expect the RBA to take a cautious approach, an uptick in domestic fiscal support could lead to more tightening.”
Yet, worries about additional currency interventions from Japanese officials might provide support for the Japanese yen, ultimately limiting the upside of the exchange rate. Japanese Finance Minister Satsuki Katayama, along with U.S. Treasury Secretary Scott Bessent, stated they are collaborating closely to manage currency fluctuations.
Technical analysis:
In terms of daily chart analysis, the AUD/JPY pair remains above the 20-day Bollinger Simple Moving Average (SMA) and shows a generally positive outlook, staying well above the 100-day SMA. This suggests that the broader upward trend remains intact, even after a recent pullback. The relative strength index, currently around 60, indicates positive territory without hitting overbought levels, implying some upward momentum remains but hasn’t gone excessively far.
On the upside, immediate resistance can be found just above the Bollinger Band, positioning around 114.85. A daily close beyond this point could facilitate further advancements in the existing uptrend. Conversely, initial support looks to be in the middle Bollinger Band at about 113.75, before the lower band at around 112.65, while the 100-day SMA at 110.05 acts as a deeper strategic support level, preserving the broader bullish structure.
