The Australian Dollar rebounded against the Japanese Yen on Friday morning European session, climbing above the 112.50 level to trade near 112.80. Despite this modest recovery, the cross pair remains capped below its 100-day simple moving average, signaling continued technical resistance overhead.
The upside potential for AUD/JPY appears limited as market participants increasingly price in expectations of a Bank of Japan interest rate hike. This anticipation has provided fresh support to the Japanese Yen, creating headwinds for the currency pair. Traders are monitoring BoJ policy signals closely as any shift toward tightening would mark a significant departure from the central bank’s ultra-loose monetary stance.
The technical picture shows the cross remains constrained within a defined range, with the 100-day SMA acting as a key barrier to further gains. Market participants trading Antipodean currencies should watch for BoJ commentary and Japanese economic data that could influence rate hike timing.
FXnCO Insight
Consider taking profits on AUD/JPY longs near current levels given strong technical resistance and growing BoJ hawkish sentiment limiting upside potential.
Source: FXStreet