AUD/JPY Price Forecast: Bearish bias persists below 100-day SMA despite gains holding near 111.00

• Gains in AUD/JPY keep the cross near 110.90 during early Asian trade on Monday.
• Trading below the 100-day SMA leaves the cross with a bearish bias.
• Resistance first comes into focus at 111.45, while 110.50 marks the nearest support to monitor.

AUD/JPY remains in positive territory near 110.90 in Monday’s early European session, with the Australian Dollar (AUD) drawing some support against the Japanese Yen (JPY) from mounting expectations of an imminent RBA interest rate increase. Attention now turns to the Reserve Bank of Australia (RBA) policy meeting later on Tuesday.

A fifth increase in the Official Cash Rate (OCR) this year is expected from the RBA. In a Bloomberg survey, almost all economists anticipate that the nine-member board will deliver a 25 basis points (bps) hike tomorrow. That would take the OCR to 4.85%, its highest in 18 years.

The possibility of currency intervention by Japanese authorities continues to keep traders on guard, as such action might strengthen the JPY and limit further gains in the cross. Speaking on Monday, Japan’s Finance Minister Satsuki Katayama said the joint FX statement with the US remains in place and the government will counter disorderly movements. She also stressed the importance of stable foreign exchange markets and the need for the government to prevent chaotic fluctuations.

Will RBA pause after hiking as TD Securities highlights upside inflation risks?

Upside inflation risks underpin TD Securities’ assessment: “the risks to inflation are tilted to the upside in Q4,” which it believes is “likely to encourage markets to price in some chance of a follow-up hike in Q1 of 2027.” Nevertheless, the bank forecasts a pause after next week’s expected increase, explaining that “after next week's anticipated hike, we forecast the Bank moving to the sidelines to assess the impact of the series of rate hikes to date.” Its reasoning is that “the lags in policy and signs of slowing economic activity should keep the Bank on hold in 2027 with cuts to commence in 2028.” The strategists also observe that “the Monetary policy bias table below is not too different from what we presented ahead of the September RBA meeting,” adding that “this time we expect” persistent upside inflation risks to reinforce the RBA’s hawkish rhetoric, even as its policy stance moves towards an extended pause.

Technical Analysis: Can AUD/JPY Reverse Its Bearish Bias Below the 100-day SMA?

Despite the recent rebound, the daily chart retains a mildly bearish tone, with AUD/JPY trading beneath the 100-day simple moving average (SMA) and its upside constrained. Consolidation continues within the Bollinger Bands: the price sits above the middle band but encounters overhead supply near the upper band. With the Relative Strength Index (RSI) around 52, momentum appears neutral to slightly stronger, though it has not yet overcome the prevailing structural resistance.

An advance would first encounter resistance near 111.45 at the upper Bollinger Band, before reaching the 100-day SMA at 111.95. Restoring a bullish short-term bias would require a daily close above that level. Beyond it, the next obstacle is the 18 August high of 113.61. 

For a decline, the middle Bollinger Band around 110.50 offers the nearest support, ahead of the psychological 110.00 mark. Further support lies at 109.50, the lower Bollinger Band. A break beneath this boundary would once again open the way for a more pronounced continuation of the downtrend.

(The technical analysis of this story was written with the help of an AI tool. Know more.)