AUD/JPY Pair Tests Resistance at ¥112 Amid Interest Rate Differential

The AUD/JPY pair is currently within its longer-term range, as traders take advantage of the swap. The Australian dollar has been experiencing choppy movements against the Japanese yen during the early part of the session on Tuesday, with the price challenging both the ¥112 level and the 50-day EMA.

The overall consolidation range for this pair is between ¥110 and ¥115, with the 200-day EMA sitting at the ¥110 level. Interest rates continue to play a significant role in this market, as the Australian dollar benefits from the interest rate differential with Japan.

Christopher Lewis, a technical analyst at DailyForex, notes that even though the Bank of Japan occasionally intervenes, it hasn't led to a breakdown of the AUD/JPY pair. This suggests that the market still has plenty of buoyancy to it, making short-term pullbacks potential buying opportunities.

As long as the price remains above ¥110, Lewis remains fairly bullish on this pair. However, he also acknowledges that the situation could be choppy, and traders should remain patient. The Japanese yen is expected to continue struggling due to recent market developments, including a vote to raise rates with two dissenters.