The AUD/JPY cross is trading in negative territory around 97.85 during European hours on Friday, but downside pressure appears limited as markets scale back expectations for Reserve Bank of Australia (RBA) rate cuts following hotter-than-expected inflation data.
Australian CPI shifts policy outlook
Australia’s monthly CPI rose at the fastest annual pace in a year in August, signaling persistent price pressures that dampened expectations of imminent policy easing. According to Reuters, the probability of a November rate cut fell to 50%, down from nearly 70% before the release.
Technical outlook for AUD/JPY
From a technical perspective, AUD/JPY remains supported above the 100-day Exponential Moving Average (EMA) on the daily chart, maintaining a constructive bias. The 14-day Relative Strength Index (RSI) stands above the midline near 60.30, suggesting sustained bullish momentum in the near term.
Key resistance is seen at 98.35, the September 15 high. A clear move above this level would open the door toward 98.60, the upper boundary of the Bollinger Band, with further upside targeting 99.17 (January 7 high) and the psychological 100.00 mark.
On the downside, initial support lies at 97.28, the September 24 low. A break below could expose 96.31, the September 3 low, with the 100-day EMA and the round 96.00 level acting as additional downside filters.
