AUD/JPY Price Forecast: Seems vulnerable while below 93.00 and 23.6% Fibo. level
AUD/JPY attracts fresh sellers in reaction to the RBA’s dovish rate cut on Tuesday.
Bets for more BoJ rate hikes in 2025 underpin the JPY and contribute to the slide.
The technical setup favors bears and supports prospects for a further depreciation.
The AUD/JPY cross comes under renewed selling pressure following the previous day's modest uptick and drops to a nearly two-week low during the first half of the European session on Tuesday. Spot prices currently trade around the 92.70 region, down over 0.85% for the day, and seem vulnerable to slide further.
An intraday breakdown and acceptance below the 23.6% Fibonacci retracement level of the April-May move higher validates the negative outlook. Moreover, oscillators on the daily chart have just started gaining negative traction and are holding deep in the bearish territory on the 4-hour chart. This, in turn, suggests that the path of least resistance for the AUD/JPY cross is to the downside amid the Reserve Bank of Australia's (RBA) dovish outlook, which marks a big divergence in comparison to bets for more rate hikes by the Bank of Japan (BoJ).
Hence, some follow-through weakness towards the 91.95-91.75 confluence, comprising the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibo. level, looks like a distinct possibility. A convincing break below the said support should pave the way for deeper losses towards the 91.40 intermediate support before the AUD/JPY cross eventually drops to the 91.00 round figure en route to the 90.84 region, or the 50% Fibo. level.
On the flip side, any attempted recovery might now be seen as a selling opportunity near the 93.00 mark. This should cap the AUD/JPY cross near the 93.50-93.60 region, or the 23.6% Fibo. level. A sustained strength beyond the latter, however, might trigger a short-covering move and lift spot prices beyond the 94.00 round figure, towards the 94.65-94.75 region en route to the 95.00 psychological mark.
AUD/JPY 4-hour chart
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