AUD/JPY Price Forecast: Bullish signals persist above 100-day EMA

• AUD/JPY edges lower around 107.70 in Friday’s early European session. 

• Japan’s Tokyo core inflation slowed more than expected in January.

• The constructive outlook for the cross remains intact above the 100-day EMA and bullish RSI momentum. 

• The first upside barrier emerges at 108.35; the first support level to watch is 106.45.

The AUD/JPY cross drifts lower near 107.70 during the early European session on Friday. The expectations of coordinated US-Japan intervention could provide some support to the Japanese Yen (JPY) against the Australian Dollar (AUD). Japan’s Prime Minister Sanae Takaichi warned last week that officials stand ready to take necessary steps against speculative and highly abnormal market moves.

On the other hand, the upside for the JPY might be limited as softer-than-expected Japan’s Tokyo Consumer Price Index (CPI) trims near-term Bank of Japan (BoJ) hike expectations. Data released by the Statistics Bureau of Japan on Friday revealed that the headline Tokyo CPI rose 1.5% YoY in January, the slowest pace since March 2022, compared to 2.0% in the previous month. 

Meanwhile, Tokyo Core CPI inflation eased to 2.0% year-on-year in January,  the slowest pace since October 2024, down from a 2.3% increase in December and below market expectations of 2.2%. This report reinforces expectations that the Japanese central bank will remain cautious on further rate hikes.

Technical Analysis:

In the daily chart, AUD/JPY holds well above the rising 20-day SMA and the 100-day EMA, underscoring an entrenched bullish trend. Both averages slope higher, confirming upward bias and providing dynamic support. RSI at 63.64 remains in positive territory after easing from prior overbought readings, signaling vigorous yet moderated momentum. Immediate resistance emerges at the upper Bollinger Band at 108.35, while first support aligns with the middle band at 106.45. A daily close above resistance could extend gains, whereas a pause there would favor a pullback toward the mid-band.

Price hovers near the upper Bollinger Band, indicating persistent bullish pressure and stretched conditions. The bands have widened in recent sessions, flagging rising volatility and momentum. The 20-day SMA continues to ascend, keeping a supportive tone on pullbacks, while the 100-day EMA far below anchors the broader uptrend.