AUD/JPY Forecast: Cross Holds Above 94.60 Amid Weak Yen and Bullish Momentum

AUD/JPY Holds Firm Above 94.60 Amid Yen Weakness and Positive Sentiment

The AUD/JPY currency pair is holding steady just above the 94.60 mark on Friday, reflecting modest daily gains after briefly hitting a multi-week high of 94.85. The cross remains buoyed by a combination of weak Japanese inflation data and risk-on market sentiment.

Key Drivers Behind AUD/JPY Movement:

• Soft Tokyo CPI print:
  Japan's weaker-than-expected Consumer Price Index for Tokyo in June dented expectations for a Bank of Japan rate hike, weighing on the Japanese Yen (JPY).
• Favorable risk environment:
  Global risk appetite continues to lift risk-sensitive assets like the Australian Dollar (AUD), especially against safe-haven currencies like the Yen.

Technical Outlook:

From a technical perspective, AUD/JPY is consolidating within a rectangle range pattern observed over the past two weeks. This formation, paired with supportive momentum indicators on the daily chart, implies:

• Resistance: ~94.85 (recent high), 95.00
• Support: 94.30, 94.00
• Trend bias: Bullish, with the potential for a breakout above 95.00 if momentum continues

The rectangle pattern signals bullish consolidation, and the Relative Strength Index (RSI) remains in positive territory, pointing toward further upside potential.

Monetary Policy Watch:

Investors should closely monitor:

• BoJ’s upcoming rate decision outlook
• AUD sensitivity to Chinese economic data and commodity prices
• Broader FX risk trends related to Fed policy developments

Stay tuned to Tredu’s forex analysis section for real-time updates and more AUD/JPY trading insights.