AUD/JPY Price Forecast: Sticks to RBA-inspired gains near mid-95.00s, or multi-month top

AUD/JPY jumps to a multi-month peak following the RBA’s surprise on hold rate decision.
Reduced BoJ rate hike bets undermine the JPY and lend additional support to spot prices.
The recent breakout through a short-term trading range resistance favors bullish traders.

Haresh Menghani FXStreet

The AUD/JPY cross attracts strong follow-through buying on Tuesday and rallies to a nearly four-month high in reaction to the Reserve Bank of Australia's (RBA) surprise decision to keep interest rates on hold. Apart from this, expectations that the Bank of Japan (BoJ) could delay raising interest rates again undermine the Japanese Yen (JPY) and assist spot prices to trade around the mid-95.00s during the early European session.

From a technical perspective, the recent breakout through the top end of a short-term trading range, around the 94.70-94.80 zone, and acceptance above the 95.00 psychological mark could be seen as a key trigger for the AUD/JPY bulls. Moreover, oscillators on the daily chart are holding comfortably in positive territory and are still away from being in the overbought zone. This, in turn, suggests that the path of least resistance for spot prices remains to the upside.

However, it will still be prudent to wait for a subsequent strength beyond the 95.70-95.75 horizontal resistance before positioning for any further appreciable move. The AUD/JPY cross might then surpass the 96.00 round figure and accelerate the move up to the next relevant hurdle near the 96.55 region. The momentum could extend further towards reclaiming the 97.00 mark en route to the February monthly swing high, around the 97.30-97.35 zone.

On the flip side, corrective pullbacks might now find decent support near the 95.00 mark. Any further slide to the 94.80-94.70 resistance breakpoint could be seen as a buying opportunity. This should help limit the downside for the AUD/JPY cross near the weekly low, around the 94.25 region touched on Monday. Sustained weakness below the latter, leading to a subsequent break through the 94.00 round figure, might shift the bias in favor of bearish traders.

AUD/JPY daily chart

Economic Indicator

RBA Interest Rate Decision

The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.

EUR/USD edges lower below 1.1650 as Middle East tensions fuel US Dollar strength

The EUR/USD pair trades in negative territory around 1.1635 during the early Asian session on Thursday. The US Dollar strengthens against the Euro as escalating Middle East conflict boosts safe-haven flows. Traders brace for the Eurozone Retail Sales and US weekly Initial Jobless Claims reports, which will be released later on Thursday.

GBP/USD tests key moving averages as growth downgrade weighs

GBP/USD was nearly flat on Wednesday, edging up 0.08% to settle around 1.3370 in a quiet session. The pair has fallen sharply from its late-January high near 1.3870 and is now testing the 200-day Exponential Moving Average, with this week's one-week forex heatmap showing Pound Sterling as one of the worst performers against the US Dollar, down about 1.4% on the week.

Gold benefits from a retreating USD; reduced Fed rate cut bets cap gains

Gold attracts some buyers for the second consecutive day on Thursday amid a modest US Dollar pullback from an over three-month high, though it remains below the $5,200 mark. Wednesday's upbeat US macro data further tempered hopes for three rate cuts by the Fed in 2026. Furthermore, escalating Middle East tensions might continue to benefit the USD's status as the global reserve currency and contribute to capping the bullion.