AUD/JPY Tests 109.30 Support: Can the Aussie Yen Recover From Six-Month Lows?

Forex

Summary:

AUD/JPY is stabilising near the 109.30 area after a sharp decline, with softer Australian inflation momentum and renewed JPY strength pushing the pair toward key support levels....

BUY AUDJPY

EXP

TRADING

109.300

Entry Price

109.900

108.950

109.588 +0.310 +0.28%

0.0

Pips

Flat

108.950

Exit Price

109.300

Entry Price

109.900

Overview

AUD/JPY enters October after a prolonged decline caused by a combination of weaker Australian economic momentum and renewed demand for the Japanese yen. The pair recently traded around 109.30–109.40 after falling sharply from higher levels, with markets reassessing the impact of the Reserve Bank of Australia’s policy decision. Although the RBA raised its cash rate to 4.60%, AUD/JPY still declined because softer core inflation reduced expectations for further aggressive tightening.

The Japanese yen has also benefited from defensive flows as global markets remain sensitive to elevated bond yields and risk conditions. AUD/JPY is traditionally vulnerable when investors reduce exposure to carry trades because the pair reflects the difference between Australia’s higher-yielding currency and Japan’s low-yielding funding currency.

Technically, the 109.30 region is important because price is approaching a cluster of intraday support levels. Current pivot calculations place S1 around 109.28 and S2 around 109.21–109.29, while the current pivot sits near 109.41. This creates a reasonable location for a short-term bounce attempt, especially after consecutive bearish sessions.

However, the BUY should be viewed as a rebound from support rather than confirmation of a larger bullish reversal. The pair remains below major moving averages, with MA20 around 109.57 and MA50 near 110.03, showing that sellers still control the broader short-term structure.

Market Sentiment

Market sentiment toward AUD/JPY remains cautious. The recent decline despite the RBA rate increase shows that traders are prioritising growth and inflation expectations rather than only interest-rate differentials. Softer Australian trimmed mean inflation reduced the probability of further aggressive tightening, limiting AUD upside.

At the same time, the yen continues to attract demand during periods of uncertainty. The pair’s recent weakness reflects a shift away from carry-trade positioning, where investors reduce exposure to higher-beta currencies such as AUD.

For the M15 BUY at 109.30, the key factor is whether sellers become exhausted around support. The current technical data shows RSI around 37–38 and MACD remaining negative, indicating bearish momentum but also suggesting the pair is approaching a stretched condition.

A successful defence of 109.30 could trigger short covering toward 109.70–110.00. However, if price breaks below 109.00, the support failure would indicate that downside momentum remains dominant.

Technical Analysis

AUD/JPY Tests 109.30 Support: Can the Aussie Yen Recover From Six-Month Lows?_1

Using Bollinger Bands (20,0,2), Ichimoku (9,26,52) and Stochastic (5,3,3) on M15, the 109.30 entry represents a potential lower-band reversal setup. After the recent decline, price is trading near the lower volatility boundary, where a rejection candle and recovery toward the Bollinger middle band would signal weakening selling pressure.

For Bollinger Bands (20,0,2), the preferred scenario is that AUD/JPY holds above 109.20–109.30 and moves back toward the middle band around 109.60–109.70. A continued move outside the lower band would indicate a strong bearish expansion and invalidate the rebound idea.

For Ichimoku (9,26,52), the structure remains bearish because price is below the Kijun-sen and cloud. The BUY becomes stronger only if AUD/JPY forms a higher low near 109.30 and reclaims the M15 Kijun. Until then, this remains a counter-trend scalp.

For Stochastic (5,3,3), the ideal confirmation is a bullish crossover from the lower zone while price holds support. This would indicate that selling momentum is fading. If Stochastic rises without price recovery, the signal would be weak.

The first upside resistance is around 109.70, followed by 110.00–110.10. A breakdown below 109.00 would expose the next downside area around 108.70.

Trade Recommendation

Entry: 109.30

Take Profit: 109.90

Stop Loss: 108.95

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