AUD/JPY Price Forecast: Weakens below 113.50 on safe-haven demand, but maintains bullish outlook

The AUD/JPY cross attracts some sellers to near 113.40 during the early European session on Thursday. Escalating tensions in the Middle East continue to boost the safe-haven currencies such as the Japanese Yen (JPY) against the Australian Dollar (AUD). 

Bloomberg reported on Thursday that Oman has evacuated all vessels from its key oil export terminal at Mina Al Fahal as a precautionary measure. The evacuation order came after drones struck fuel tanks at Oman’s Salalah Port on Wednesday, while others were intercepted. Meanwhile, Iran has launched its “most intense operation since the beginning of the war. Tehran stepped up its efforts to halt traffic through the Strait of Hormuz, the critical oil conduit. Signs of a prolonged conflict in the Middle East could weigh on the riskier assets, such as the Aussie. 

On the other hand, the hawkish expectation from the Reserve Bank of Australia (RBA) might help limit the AUD’s losses. Traders raise their bets that the RBA will raise interest rates next week as the conflict in the Middle East drags on, triggering a spike in the oil price and leaving the central bank more worried about inflation.

Technical Analysis:

In the daily chart, the near-term bias of AUD/JPY is bullish as price holds near recent highs after an extended advance from the 107.00 area. The cross stays well above the rising 100-day EMA around 106.00, which underpins the broader uptrend. The latest Bollinger structure shows price pushing above the upper band near 113.65, signaling strong upside momentum but also stretched conditions after the recent breakout above the mid-band cluster around 110.40. RSI around 70 confirms firm bullish momentum, though it also warns that upside could slow as the pair enters overbought territory.

Initial resistance is aligned with the recent peak and upper Bollinger Band at 113.70, with a sustained break opening the way toward the 115.00 region. On the downside, first support emerges at the prior consolidation and mid-Bollinger area near 110.40, followed by stronger support around 108.50 where the Bollinger mid-line and recent swing lows converge. A daily close below 108.50 would weaken the bullish structure and expose the 100-day EMA zone near 106.00 as the next downside objective.

(The technical analysis of this story was written with the help of an AI tool.)