AUD\/JPY fell for a third day and traded near 113.20 in Asian hours on Monday. Price is testing the lower trendline of an ascending triangle near 113.00, and a sustained break below it would point to a bearish pattern failure.<\/p>\n
The pair still sits above the 50-day EMA, keeping a mildly bullish near-term bias. It is consolidating between resistance at the nine-day EMA and support from the longer EMA, while the 14-day RSI is near 50.<\/p>\n
If price rebounds, it may move towards the nine-day EMA at 113.72. A break above that level could open a retest of the all-time high at 114.74, with the triangle top near 115.00.<\/p>\n
If the triangle breaks lower, the next level is the 50-day EMA at 112.44. Further weakness could bring focus to the three-month low at 108.79, set on March 31.<\/p>\n
The technical analysis was produced with help from an AI tool.<\/p>\n
We see the AUD\/JPY cross at a critical point, testing the support of a long-term ascending triangle around 113.00. The neutral RSI reading indicates market indecision, so we are watching for a decisive break. This setup presents clear opportunities for option traders on either side of the move.<\/p>\n
For those anticipating a breakdown, fundamental factors lend support to this view. Recent data showed Australian retail sales for April came in flat, and iron ore prices have softened to $115 per tonne, weighing on the Aussie. A sustained move below the 113.00 trendline could be a trigger to buy put options, targeting the 50-day EMA around 112.44 as a first step.<\/p>\n
Conversely, if support holds, a rebound is very possible. The Reserve Bank of Australia has maintained a hawkish stance compared to other central banks, holding its cash rate at 4.85% in its early May meeting. A bounce from this level could see traders purchase call options, with a break above the nine-day EMA at 113.72 signaling a potential retest of the 115.00 resistance.<\/p>\n
The bigger picture involves policy divergence between Australia and Japan. The Bank of Japan is hinting at another potential rate hike in June after Tokyo’s core inflation last week printed a stubborn 2.9%. We recall the significant central bank intervention we saw back in late 2024 and early 2025, a risk that remains on the table if the yen weakens too quickly.<\/p>\n
Given the current indecision, implied volatility is moderate, which could make strategies like long straddles appealing. This would allow traders to profit from a significant price move in either direction, which seems likely given the fundamental pressures. We are closely watching the upcoming Australian wage price index data for the next catalyst.<\/p>\n
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