The currency pair remains stable as traders await US-China trade talks, with technical indicators suggesting sustained bullish momentum.
The AUD/JPY cross traded near 114.10 in early European trading on Wednesday, reflecting cautious sentiment ahead of high-stakes US-China discussions. Market participants are refraining from significant moves until outcomes from the Trump-Xi summit in Beijing emerge, which could influence the China-linked Australian Dollar.
Technical analysis shows the pair consolidating above its 20-day and 100-day simple moving averages, reinforcing a bullish bias. The Relative Strength Index at 60 indicates positive momentum without overbought conditions, though potential Japanese currency intervention may limit gains.
HSBC economists noted the Reserve Bank of Australia is likely to maintain a wait-and-see approach, though domestic fiscal measures could prompt further tightening. Japanese and US officials have also signaled coordination on managing currency volatility.