During the early hours of Wednesday’s European trading session, the AUD/JPY cross surged below the crucial 99.00 psychological threshold. The decline in the Japanese Yen (JPY) to a multi-month low, prompted by the Bank of Japan‘s (BoJ) dovish stance following Tuesday’s hike, provided significant support to the cross. As of the latest update, the cross is trading at 98.95, marking a 0.43% increase for the day.
From a technical standpoint, AUD/JPY maintains its bullish momentum, evident as the cross remains positioned above the critical 100-period Exponential Moving Averages (EMAs) on the four-hour chart. The Relative Strength Index (RSI) continues to reside in bullish territory above the 50 midline. Nevertheless, the overbought condition of the RSI suggests the possibility of some consolidation before any further appreciation in the near term.
The initial upside barrier for the cross is anticipated at the 99.00–99.05 zone, which represents the high of February 23 and a significant psychological level. The pivotal hurdle lies at the psychological milestone of 100.00. Beyond this, the subsequent target towards the upside is situated near the weekly low of May 10, 2013, at 100.40.
Conversely, the high recorded on March 17 at 98.10 serves as the initial support level for AUD/JPY. The subsequent support to monitor is the 100-period EMA at 97.85. Any sustained selling pressure below this level would revive downside momentum, potentially pushing the cross lower towards the March 18 low at 97.65, followed by the lower boundary of the Bollinger Band at 97.24.
