Consolidating near the monthly top, the 100.00 confluence holds the key for the bulls

• AUD/JPY is trading in a range below a new monthly high hit earlier this Tuesday.
• The mixed technical setup requires some caution before positioning for further gains.
• A sustained strength beyond the 100 confluence will be seen as a new trigger for the bulls.

The AUD/JPY cross has been between tepid gains/minor losses in the first half of the European session and now appears to have stabilized in the mid-98.00s, just below the monthly peak reached earlier this session.

The Japanese yen (JPY) continues its volatile price moves in both directions amid domestic political uncertainty, which could hamper the Bank of Japan’s (BoJ) plan to steadily raise interest rates from near zero. This in turn fails to help the AUD/JPY cross build on modest overnight gains and leads to moderate range-bound price action. That said, the prevailing risk-on mood continues to undercut the safe-haven JPY, which along with the Reserve Bank of Australia’s (RBA) hawkish stance, is acting as a tailwind for the currency pair.

Technically, the AUD/JPY cross is holding comfortably above the 38.2% Fibonacci retracement level from the July-August dip. This, in turn, supports the prospects for an extension of the recent strong recovery from the vicinity of the psychological 90.00 mark, or the May 2023 low reached earlier this month. That said, the mixed oscillators on the daily chart warrant some caution for bullish traders. Therefore, any further move up is more likely to remain capped near the 100.00 confluence resistance.

The said handle comprises the all-important 200-day simple moving average (SMA) and 50% Fibo. level, which, if decisively compensated, will be seen as a new trigger for bullish traders. The AUD/JPY cross could then accelerate the positive move towards the 101.00 mark before attempting to test the 102.00-102.10 supply zone or the 61.8% Fibo. level.

On the other hand, the area of ​​97.45 (38.2% Fibo level.) seems to have now emerged as a strong immediate support. This is followed by the round figure of 97.00 and support near the 96.30-96.25 region. Some further selling below the 96.00 level could expose the 23.6% Fibo. level, around the region of 94.65, with an intermediate support near the horizontal zone of 95.55 and the psychological mark of 95.00.

AUD/JPY Daily Chart