AUD/JPY Extends Decline Below 110.50 as Bearish Bias Persists Under 100-Day SMA

By / / Breaking News

This update was written automatically with AI from market data and news wire reports, and published without review by a person.

Key Takeaways

  • AUD/JPY slipped to approximately 110.35 during Monday's early sessions, extending a decline below the 110.50 level as technical resistance holds firm.
  • The 100-day Simple Moving Average (SMA) continues to act as a major overhead barrier, reinforcing a bearish near-term bias for the currency pair.
  • Hawkish Bank of Japan (BoJ) expectations are supporting the Yen, with markets pricing in an 80% probability of a quarter-point rate hike in December.
  • RBA Chief Economist Sarah Hunter warned on Monday that Australian inflation remains too high, suggesting that further interest rate increases may still be necessary.

The AUD/JPY cross faced renewed selling pressure on Monday, October 26, 2026, as it retreated below the 110.50 mark. The pair's inability to reclaim the 100-day SMA has emboldened technical bears, with the Relative Strength Index (RSI) hovering near 47, indicating that downside momentum remains dominant without yet reaching overbought conditions.

Market sentiment is being heavily influenced by diverging central bank outlooks. In Japan, recent data showing National CPI at 2.1% has solidified the case for policy normalization. While a rate hold is widely expected at this Friday's Bank of Japan (BoJ) meeting, analysts at Mitsubishi UFJ Morgan Stanley Securities (MUFG) suggest the bank is preparing to "step on the brakes" with a potential hike to 1.50% by year-end.

In Australia, the Reserve Bank of Australia (RBA) maintains a cautious stance. Chief Economist Sarah Hunter noted on Monday that price pressures from overseas risk becoming entrenched, keeping the door open for further tightening. However, the Australian Dollar (AUD) has struggled to capitalize on this hawkishness as global risk sentiment remains fragile, favoring the safe-haven Japanese Yen (JPY).

Technically, the immediate downside target for AUD/JPY is the 110.15 support level, followed by the psychological 110.00 handle. On the upside, resistance is firmly established at 111.10, with a more significant barrier at the 100-day SMA near 112.10. A decisive break above this moving average would be required to shift the current bearish narrative toward a more neutral or bullish outlook.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. We are not financial professionals. The authors and/or site operators may hold positions in the companies or assets mentioned. Always do your own research before making financial decisions.
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