- AUD/JPY strengthens near 98.20 in Friday’s early European session.
- The cross keeps the bullish view, but the overbought RSI condition might cap its upside.
- The immediate resistance level is seen at 100.00; the initial support level is located at 97.01.
The AUD/JPY cross trades in positive territory for the third consecutive day around 98.20 during the early European session on Friday. The Japanese Yen (JPY) softens against the Australian Dollar (AUD) on political uncertainty in Japan. Japan’s Prime Minister Shigeru Ishiba’s resignation could offer the Bank of Japan (BoJ) extra room to delay its next interest rate hike, especially if the next leader is concerned about borrowing prices rising too rapidly.
Technically, the constructive outlook of AUD/JPY remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. Nonetheless, the 14-day Relative Strength Index (RSI) stands above the midline near 71.00, indicating the overbought RSI condition. This suggests that further consolidation or a temporary sell-off cannot be ruled out before positioning for any near-term AUD/JPY appreciation.
On the bright side, the key upside barrier for the cross emerges at the 100.00 psychological level. Further north, the next hurdle is seen at 101.56, the high of November 20, 2024. A decisive break above this level could pick up more momentum and aim for 102.41, the high of November 7, 2024
On the other hand, the initial support level for AUD/JPY is located at 97.01, the low of September 10. Any follow-through selling below this level could expose 96.31, the low of the low of September 5. The additional downside filter to watch is 95.50, the 100-day EMA.
AUD/JPY daily chart
