AUD/JPY Price Forecast: Retakes 110.00 on upbeat China GDP; upside seems limited

AUD/JPY gains positive traction for the second straight day amid a combination of supporting factors.
Hawkish comments from RBA’s Ken and China’s upbeat GDP report provide a goodish lift to the AUD.
A cautious BoJ weighs on the JPY, though intervention risks could cap the cross amid a bearish setup.

The AUD/JPY cross attracts some follow-through buyers for the second straight day on Monday, recovering further from an eight-month low, around the 108.65-108.60 region, touched last week. Spot prices climbed back above the 110.00 psychological mark during the Asian session amid a combination of supporting factors.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

The Australian Dollar (AUD) gets a minor lift in reaction to Reserve Bank of Australia (RBA) Assistant Governor Chris Kent's hawkish remarks and China's better-than-expected Gross Domestic Product (GDP), showing that the economy expanded by 4.5% YoY in the third quarter. The Japanese Yen (JPY), on the other hand, is undermined by cautious Bank of Japan (BoJ) expectations, acting as a tailwind for the AUD/JPY cross. Traders, however, remain on high alert that Japanese authorities might step in again to prop up the domestic currency. This, in turn, warrants some caution for bullish traders.

From a technical perspective, spot prices retain a bearish near-term bias beneath the 200-period Simple Moving Average (SMA) on the 4-hour chart and a dense Fibonacci retracement band overhead. This, in turn, suggests that rallies could be sold into despite a mildly constructive backdrop from the Relative Strength Index around 52 and a modestly positive Moving Average Convergence Divergence (MACD) reading. The AUD/JPY cross currently trades just under the 38.2% retracement at 110.17, and the next relevant hurdle is pegged near the 50.0% level at 110.63 ahead of the 200-period SMA at 110.93.

Further up, the 61.8% retracement at 111.10 could cap the currency pair ahead of 111.76 and 112.61. On the downside, immediate support is seen at the 23.6% retracement near 109.59, with a break below exposing the recent swing low around 108.66 as the next significant bearish target.

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

AUD/JPY 4-hour chart

Economic Indicator

Gross Domestic Product (YoY)

The Gross Domestic Product (GDP), released by the National Bureau of Statistics of China on a monthly basis, is a measure of the total value of all goods and services produced in China during a given period. The GDP is considered as the main measure of China’s economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally speaking, a rise in this indicator is bullish for the Renminbi (CNY), while a low reading is seen as bearish.