AUD/JPY Pushes Higher as Australian Inflation Stays Hot

Traders' Opinions

Summary:

AUD/JPY advances toward 114.30 as hotter Australian inflation strengthens expectations for an RBA rate hike. BoJ tightening expectations could limit the pace of further upside.

BUY AUDJPY

EXP

TRADING

114.300

Entry Price

115.600

113.500

114.296 +0.271 +0.24%

0.0

Pips

Flat

113.500

Exit Price

114.300

Entry Price

115.600

AUD/JPY edges higher on Wednesday, trading around 114.30, as the Australian Dollar draws fresh support from stronger-than-expected domestic inflation data.

Australia’s headline CPI increased 3.5% year-over-year in July, easing from June’s 3.8% but coming in above market expectations. More importantly, trimmed mean inflation remained sticky at 3.6%, reinforcing concerns that underlying price pressures are not cooling quickly enough.

The inflation surprise has forced markets to reconsider the RBA outlook. Pricing for a September rate hike has risen sharply, while Deutsche Bank has shifted its own forecast and now expects the RBA to deliver a 25-basis-point increase at the September meeting. This follows the latest RBA Minutes, which indicated that policymakers remain prepared to tighten further if inflation risks intensify.

The Yen, however, could prevent AUD/JPY from advancing unchecked. Expectations for a September BoJ rate hike remain firm, giving the Japanese currency some underlying support despite its weakness against the Aussie.

The immediate advantage remains with the Australian Dollar. The stronger inflation print has introduced a more credible near-term RBA tightening risk, which could keep AUD/JPY supported, although increasingly hawkish BoJ expectations may make further gains more gradual.

Technical Analysis

AUD/JPY continues to lean decisively higher, with buyers maintaining control of the short-term structure. Price has steadily advanced from the 112.00 region, while successive pullbacks have been absorbed at progressively higher levels, keeping the rising trendline intact.

The pair is now attempting to push through the 114.20–114.30 area, which has acted as the latest ceiling. Price action around this level suggests sellers are struggling to force a meaningful reversal, increasing the probability that resistance eventually gives way. Confirmation above 114.30 would reinforce the breakout and allow buyers to target the 114.90–115.00 area.

If bullish momentum continues to build, attention would then shift toward 115.50–115.70, which represents the broader upside objective. A temporary retreat toward the breakout zone would not necessarily change this outlook and could instead provide a healthier base for another push higher.

Support sits around 113.50–113.60, an area that has already played an important role in the latest advance. Remaining above this region keeps the sequence of higher lows intact. Only a sustained break underneath it would raise the risk of a deeper correction toward 112.65–112.75.

For now, the path of least resistance remains higher. A successful hold above 114.30 would leave AUD/JPY well positioned to extend the rally toward 115.00 and ultimately 115.60.

TRADE RECOMMENDATION

BUY AUD/JPY

ENTRY PRICE: 114.30

STOP LOSS: 113.50

TAKE PROFIT: 115.60

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AUD/JPY Pushes Higher as Australian Inflation Stays Hot

Technical Analysis

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