AUD/JPY Faces Resistance Ahead of Reserve Bank of Australia Rate Decision

In recent trading sessions, the Australian Dollar to Japanese Yen (AUD/JPY) currency pair has been attempting to close above its 50-day simple moving average (SMA) of 98.25. This movement has generated interest in the financial markets, particularly as traders await the upcoming decision from the Reserve Bank of Australia (RBA) regarding interest rates.

Traders are experiencing a notable sense of déjà vu with the current scenario. In July, the same 50-day SMA line led to a bearish continuation for the pair. However, this time around, there may be more optimism among the bulls, possibly leading to a different outcome. The Relative Strength Index (RSI) has surpassed its previous high above the 50 neutral mark, which could indicate sufficient buying momentum to drive an extension towards the key 200-day SMA at 100. This point previously halted a recovery from the 15-month low of 90.10 recorded early this month.

The area around the 100 level coincides with the 50% Fibonacci retracement of July’s decline. Breaking above this point could potentially pave the way for the AUD/JPY pair to move towards the 102.00-103.00 range. Conversely, should bearish forces reemerge, the 38.2% Fibonacci level at 97.60 and the 20-day SMA could serve as support levels, potentially preventing a drop toward the 23.6% Fibonacci level at 94.65.

Further downward movement might test the support at 93.60 and could extend towards a tentative ascending trend line connecting 2023 and 2024 lows, close to the 90.75 mark. There is also a potential support barrier around 92.00 that may play a critical role in any bearish scenario.

The overall technical outlook for the AUD/JPY remains positive, but sustained buying interest above the 100.00 mark would be necessary for an upgraded outlook.

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