AUD/JPY Price Forecast: Constructive bias prevails above 113.00, but neutral RSI spurs consolidation

The AUD/JPY cross trades in negative territory around 113.25 during the early European session on Wednesday. The Japanese Yen (JPY) edges higher against the Australian Dollar (AUD) after the Bank of Japan (BoJ) raised interest rates to their highest level in more than three decades. 

The BoJ decided to raise the short-term interest rate by 25 basis points (bps) to 1.0% from 0.75% after concluding the two-day monetary policy review meeting on Tuesday, as widely expected. 

According to the Monetary Policy Statement, the board member will continue to increase the policy rate in response to developments in economic activity, prices and financial conditions.

On the other hand, the Reserve Bank of Australia (RBA) decided to leave the Official Cash Rate (OCR) unchanged at 4.35% after its June monetary policy meeting on Tuesday. This is a pause following three consecutive 25 basis points (bps) rate hikes earlier this year. Despite leaving the interest rate unchanged, the board members signaled that further rate hikes might be necessary to achieve its goals.

Technical Analysis:

In the daily chart, AUD/JPY holds a constructive bias as spot remains above the 100-day Simple Moving Average (SMA) while pressing into the Bollinger Bands’ upper half. The 14-period Relative Strength Index (RSI) around 48 hints at consolidative rather than overbought conditions, suggesting any pullbacks could stay contained above underlying trend support.

On the topside, a sustained break over the Bollinger SMA middle band at 113.58 would open the door toward the Bollinger upper band resistance near 114.90. On the downside, initial support aligns with the recent pivot zone around 113.23, followed by the Bollinger lower band at 112.25 and then the 100-day SMA near 112.00, where a deeper retreat would need to find buyers to maintain the prevailing upward bias.

(The technical analysis of this story was written with the help of an AI tool.)