AUD/JPY Price Forecast: Sticks to RBA-inspired gains near mid-95.00s, or multi-month top

• AUD/JPY jumps to a multi-month peak following the RBA's surprise on hold rate decision.
• Reduced BoJ rate hike bets undermine the JPY and lend additional support to spot prices.
• The recent breakout through a short-term trading range resistance favors bullish traders.

The AUD/JPY cross attracts strong follow-through buying on Tuesday and rallies to a nearly four-month high in reaction to the Reserve Bank of Australia's (RBA) surprise decision to keep interest rates on hold. Apart from this, expectations that the Bank of Japan (BoJ) could delay raising interest rates again undermine the Japanese Yen (JPY) and assist spot prices to trade around the mid-95.00s during the early European session.

From a technical perspective, the recent breakout through the top end of a short-term trading range, around the 94.70-94.80 zone, and acceptance above the 95.00 psychological mark could be seen as a key trigger for the AUD/JPY bulls. Moreover, oscillators on the daily chart are holding comfortably in positive territory and are still away from being in the overbought zone. This, in turn, suggests that the path of least resistance for spot prices remains to the upside.

However, it will still be prudent to wait for a subsequent strength beyond the 95.70-95.75 horizontal resistance before positioning for any further appreciable move. The AUD/JPY cross might then surpass the 96.00 round figure and accelerate the move up to the next relevant hurdle near the 96.55 region. The momentum could extend further towards reclaiming the 97.00 mark en route to the February monthly swing high, around the 97.30-97.35 zone.

On the flip side, corrective pullbacks might now find decent support near the 95.00 mark. Any further slide to the 94.80-94.70 resistance breakpoint could be seen as a buying opportunity. This should help limit the downside for the AUD/JPY cross near the weekly low, around the 94.25 region touched on Monday. Sustained weakness below the latter, leading to a subsequent break through the 94.00 round figure, might shift the bias in favor of bearish traders.

AUD/JPY daily chart