The currency pair retreats amid geopolitical risks and potential Japanese intervention, though technicals signal a bullish bias remains intact.
The AUD/JPY cross fell to 112.62 in early European trading Thursday, pressured by a stronger Japanese Yen as Middle East tensions escalated following US comments on Iran. Traders are also monitoring potential intervention by Japanese authorities to curb excessive yen weakness, which some analysts argue misaligns with economic fundamentals.
Technical indicators show the pair holding above its 100-day moving average and the Bollinger Bands’ 20-day SMA, reinforcing a constructive uptrend despite the pullback. The Relative Strength Index near 50 suggests consolidation rather than a reversal, with support at 112.55 and resistance at 113.55.
Downside risks include the Bollinger midline at 112.42 and the lower band at 111.15, while the June 16 high of 113.55 remains the next upside target.