The AUD/JPY currency pair is experiencing a bullish trend, with the Australian Dollar (AUD) strengthening against the Japanese Yen (JPY) following a strong employment report from Australia. The unemployment rate remained stable at 4.4% in June, while employment change saw a significant increase of 76.3K, surpassing market expectations. However, the possibility of currency intervention by Japanese authorities could potentially impact the JPY and limit the upside for the cross. Technical analysis indicates a bullish bias, with the price holding above the 100-day simple moving average (SMA) and the Bollinger Bands' 20-day SMA, suggesting an ongoing uptrend. The Relative Strength Index (RSI) is also pointing towards positive momentum, although it is approaching overbought territory, indicating a potential slowdown in the upside. On the resistance side, the Bollinger upper band at 114.70 is the immediate hurdle, and a break above it could open up further gains. Support levels are seen at 113.55 and 112.95, with the 100-day SMA at 112.85 acting as a crucial contention point. A sustained move below these levels could trigger a deeper correction. Additionally, the AUD/JPY pair faces seasonal headwinds, as TD Securities highlights the historical bearish seasonality in July and August, with the pair experiencing losses in these months over the past 20 years. The Japanese Yen (JPY) is a highly traded currency, influenced by the performance of the Japanese economy, the Bank of Japan's policy, and risk sentiment among traders. The BoJ's currency control mandate and its intervention in the past, aimed at lowering the Yen's value, have shaped the currency's dynamics. The ultra-loose monetary policy between 2013 and 2024 contributed to the Yen's depreciation, but the recent unwinding of this policy has provided some support. The JPY is also considered a safe-haven investment, with its value strengthening during market stress. In conclusion, the AUD/JPY pair's bullish trend is supported by strong economic data, but the potential for currency intervention and seasonal headwinds should be monitored closely.
