AUD/JPY Price Forecast: Strengthens above 108.50, RSI signals overbought conditions
AUD/JPY gains ground to around 108.55 in Friday’s early European session.
The cross keeps bullish vibe, but further consolidation cannot be ruled out in the near term amid overbought RSI momentum.
A pullback would target the initial support level at 105.85.
The AUD/JPY cross gathers strength to near 108.55 during the early European session on Friday. The Japanese Yen weakens against the Australian Dollar (AUD) after the Bank of Japan (BoJ) interest rate decision.
As widely expected, the BoJ decided to leave its benchmark rate unchanged at 0.75% following the conclusion of the two-day monetary policy review meeting on Friday. That leaves borrowing costs at the highest level in three decades.
Board member Hajime Takata also proposed hiking rates for the second consecutive meeting, which found no other voices in support but highlighted the hawkish momentum within the Japanese central bank.
According to the BoJ’s quarterly outlook report, the BoJ raised its growth forecast for fiscal 2025 and 2026 and maintained its view that the economy will remain on course for a moderate recovery.
Technical Analysis:
In the daily chart, AUD/JPY holds above the 100-day EMA at 102.07, underscoring a firm bullish bias. The positive slope supports continuation while the distance from the average warns of mean-reversion risk. Price has pushed above the upper Bollinger Band at 108.10, signaling stretched conditions amid strong upside pressure. The bands continue to widen, reflecting rising volatility and an accelerating trend.
RSI at 77.21 sits in overbought territory, confirming robust momentum but raising the risk of a cooling phase. A pullback would target the Bollinger middle band at 105.85, with the lower band near 103.62 offering additional support if momentum fades. On the topside, maintaining closes above the upper band would keep the path of least resistance higher, though near-term consolidation could unfold before an extension.
The above content was completed with the assistance of AI and has been reviewed by an editor.
