AUD/JPY Price Forecast: Bearish bias remains unchanged near 93.00
- AUD/JPY holds positive ground around 93.10 in Wednesday’s early European session.
- Negative view of the cross prevails below the 100-day EMA, but consolidation cannot be ruled out with neutral RSI indicator.
- The initial support level is seen at 91.68; the immediate resistance level to watch is 93.90.
The AUD/JPY cross trades in positive territory near 93.10 during the early European session on Wednesday. The Australian Dollar (AUD) remains weak against the Japanese Yen (JPY) after Australia’s first quarter (Q1) economic growth missed estimates.
Data released by the Australian Bureau of Statistics (ABS) on Wednesday showed that the country’s Gross Domestic Product (GDP) grew 0.2% QoQ in Q1 of 2025 versus 0.6% prior. This reading came in weaker than the expectations of 0.4%. On an annual basis, the GDP expanded by 1.3%, compared with the 1.3% growth in Q4 while below the consensus of a 1.5% increase.
Technically, the bearish outlook of AUD/JPY remains in play as the cross remains capped below the key 100-day Exponential Moving Average (EMA) on the daily chart. However, further consolidation or temporary recovery cannot be ruled out, with the 14-day Relative Strength Index (RSI) hovering around the midline.
The lower limit of the Bollinger Band at 91.68 acts as an initial support level for the cross. A decisive break below the mentioned level could expose 90.70, the low of April 30. Further south, the crucial contention level is seen at the 90.00 psychological figure.
On the bright side, the first upside barrier for AUD/JPY to watch is 93.90, the 100-day EMA. Sustained trading above this level could pave the way to 94.78, the upper boundary of the Bollinger Band. Extended gains could see the next hurdle at 95.65, the high of May 13.
AUD/JPY daily chart
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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