The AUD/JPY pair fell to around 102.70 during the early European session on Thursday. The Japanese yen (JPY) rose against the Australian dollar (AUD) amid strong expectations of an imminent interest rate hike by the Bank of Japan (BoJ) this week.
The Bank of Japan is expected to raise interest rates to 0.75% from 0.5% at the two-day policy meeting that ends on Friday. The move would be the first interest rate increase since January and would lift the benchmark interest rate to its highest level in three decades. Additionally, recent reports said the Bank of Japan is likely to keep its pledge to continue raising interest rates, but stressed that the pace will depend on how the economy reacts to each hike.
Technical analysis:
On the daily chart, the AUD/JPY pair is trading at 102.70. The pair is holding well above the 100-day moving average at 99.44, keeping the broader uptrend intact. The average is sloping upward, reinforcing the dip-buying bias. The RSI at 54.91 is neutral to somewhat positive, reflecting moderate but steady momentum. The price is just above the middle Bollinger band at 102.61, and conditions are slanting to the upside, indicating trend continuation.
The stability of the daily close above the middle band will maintain upward pressure towards the upper Bollinger band at 104.43. A break below this pivot could expose the lower band at 100.78, with the 100-day EMA at 99.44 providing deeper support. The range expansion is still gradual, so a decisive breakout will require a rise in volatility.
(Technical analysis of this story was written with the help of an artificial intelligence tool)
