The AUD/JPY cross is trading in negative territory near 100.85 during the early European session on Friday. Despite this dip, the potential downside for the Australian Dollar (AUD) may be limited due to a strong job market. This robust employment data suggests that the Reserve Bank of Australia (RBA) is likely to keep interest rates on hold for the time being.
Data released by the Australian Bureau of Statistics (ABS) on Thursday showed that Australia’s Unemployment Rate declined to 4.3% in October from 4.5% in September. This figure came in below the market consensus of 4.4%. Furthermore, the Australian Employment Change reached 42.2K in October, a significant increase compared to 12.8K in September (revised from 14.9K), and well above the consensus forecast of 20K.
From a technical perspective, AUD/JPY maintains a bullish outlook in the longer term. The cross remains well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart, indicating a solid foundation. Additionally, the upward momentum is reinforced by the 14-day Relative Strength Index (RSI), which stands above the midline near 59.10, suggesting continued bullish momentum in the near term.
On the upside, the key resistance zone for AUD/JPY is located between 101.80 and 101.85. This range represents the upper boundary of the Bollinger Band as well as the high reached on November 13. Should the cross sustain trading above this level, a rally toward 102.30—the high of November 8, 2024—could be expected. Beyond this, the next significant hurdle comes into focus at 103.48, the high from April 26, 2024.
On the downside, the key support level is situated at the psychological 100.00 mark. A sustained move below this level, marked by more bearish candlesticks, could pull the cross down toward 98.97, the low of November 7. If the selling pressure continues, the next support to watch is 98.28, which corresponds to the lower limit of the Bollinger Band.
Overall, AUD/JPY appears poised to maintain its bullish trend unless sentiment shifts decisively below critical support. Traders and investors should keep an eye on the outlined levels for potential entry and exit points.
*AUD/JPY Daily Chart*
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