The AUD/JPY pair saw increased selling interest, dipping to around 97.75 during early European trading on Friday. The Japanese Yen (JPY) gained strength after Japan’s Tokyo Consumer Price Index (CPI) showed its first acceleration in three months, reinforcing expectations that the Bank of Japan (BoJ) may raise interest rates in December.
Bearish Momentum Remains Intact
The bearish outlook for AUD/JPY remains intact, as the pair continues to trade below the key 100-period Exponential Moving Average (EMA), indicating a persistent downtrend. The Relative Strength Index (RSI) is also below the neutral 50 level, confirming the ongoing downward momentum. However, with the RSI in oversold territory, further consolidation is possible before the pair resumes its decline.
Support and Resistance Levels to Watch
On the downside, the initial support is found near 97.45, which aligns with the lower limit of the Bollinger Bands. A break below this level could see further declines toward 96.60, the September 4 low. The psychological level of 96.00 is another significant support to monitor.
To the upside, the immediate resistance is at 98.76, the high from November 28. If the pair can break above this level, the next hurdle lies at 99.00, followed by 99.49, the low from November 19. The 100.00 level remains a major psychological barrier for any bullish movement.
Outlook
The AUD/JPY remains under pressure, with Japanese inflation data adding further support for a potential BoJ rate hike. While short-term consolidation is possible, the broader trend suggests continued downside risks for the pair.
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