AUD/JPY Price Forecast: Holds gains above 114.00, bullish momentum prevails

The AUD/JPY cross gathers strength near 114.00 during the early European trading hours on Tuesday. A hawkish tone from the Reserve Bank of Australia (RBA) provides some support to the Australian Dollar (AUD) against the Japanese Yen (JPY). 

The Australian central bank signaled that more rate hikes were on the horizon, with its economic forecasts pencilling in a 4.70% policy rate by the end of 2026, with no cuts expected until 2028, according to CNBC.

On the other hand, the potential for further intervention from the Japanese authorities might underpin the JPY and cap the upside for the cross. Japanese officials reportedly intervened in the currency market again during the Golden Week.  

Furthermore, Japan’s Finance Minister Satsuki Katayama said on Tuesday that Japan and the United States (US) reaffirmed their ‌close cooperation on currency moves. Last week, Japan’s top foreign exchange official Atsushi Mimura stated that continued intervention was possible. 

Technical Analysis:

In the daily chart, AUD/JPY holds a constructive bullish tone as it consolidates above the 20-day Bollinger simple moving average and well above the 100-day exponential moving average. Price is lodged in the upper half of the Bollinger envelope with the upper band acting as nearby resistance, while the Relative Strength Index at about 59 stays in positive territory without yet signaling overbought conditions, suggesting persistent but not overstretched upside momentum.

On the topside, immediate resistance emerges at the May 6 high of 114.32. The next hurdle to watch is the Bollinger upper band of 114.80, and a daily close above this cap would open the way for a continuation of the uptrend. On the downside, initial support is provided by the Bollinger middle band at 113.75, ahead of secondary protection at the lower band around 112.67, with the 100-day EMA further below near 109.82 acting as a deeper trend-defining floor as long as the pair trades comfortably above it.

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