AUD/JPY Technical Outlook

Note: This section contains information in English only.
Source: Dukascopy Bank SA
On the 4 hour chart, AUD/JPY has shifted from a prior downtrend into a strong bullish reversal after breaking out of a descending channel and rallying sharply from around 109.420. The price is now trending upward with a steep structure, holding above the rising 20-period SMA, which acts as dynamic support, while nearby horizontal support at 111.374 is a key level to watch on pullbacks. Momentum currently favors buyers, with the next targets at 113.000 and then 113.780 if the rally continues. As long as price stays above the trendline and these support levels, the bullish outlook remains intact, while a break below 111.374 would signal a deeper correction.



On the daily timeframe AUD/JPY is in a bullish trend, consistently making higher highs and higher lows within an ascending channel since early 2026. After pulling back from around 113.700 to near 109.600, the pair found strong support and has resumed moving upward. Price is now back above the 20-day SMA, signaling renewed short-term strength, while the RSI near 64 shows solid momentum without being overbought. As long as price holds above key supports like 111.015 and 109.600, the outlook remains positive, with a likely move toward retesting 113.700 and potentially pushing toward 115.000 if that resistance breaks.



Fundamentally, the bullish narrative is underpinned by a widening interest rate differential as the Reserve Bank of Australia maintains a hawkish posture compared to the Bank of Japan. In its March 2026 meeting, the RBA raised the official cash rate to 4.10%, citing persistent domestic inflation and a tight labor market, with markets pricing in further tightening. Conversely, while the BoJ has pivoted away from negative rates and currently sits at 0.75%, its path toward normalization remains cautious.
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