AUD/JPY Price Forecast: Keep bullish vibe above 97.50 on RBA caution

• AUD/JPY softens to near 97.85 in Friday's early European session. 
• The cross maintains a positive outlook, with the bullish RSI condition.
• The immediate resistance level is seen at 98.35; the initial support level is located at 97.28.

The AUD/JPY cross trades in negative territory around 97.85 during the European trading hours on Friday. However, the potential downside for the cross might be limited as traders reduce their bets on a Reserve Bank of Australia (RBA) rate cut after hotter Australian Consumer Price Index (CPI) inflation data.

Australia's monthly CPI inflation rose at the fastest annual pace in a year in August, suggesting some upside to inflation that prompted traders to pare back the bets of imminent policy easing. According to Reuters, the possibility of a rate reduction at its November meeting eased to 50% from almost 70% chance before the data.  

Technically, the positive view of AUD/JPY remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. Further upside looks favorable, with the 14-day Relative Strength Index (RSI) standing above the midline near 60.30. This suggests the bullish momentum in the near term. 

On the bright side, the key upside barrier for the cross emerges at 98.35, the high of September 15. Sustained trading above the mentioned level could pave the way to 98.60, the upper boundary of the Bollinger Band. A decisive break above this level could pick up more momentum and aim for the January 7 high of 99.17, followed by the 100.00 psychological level. 

On the other hand, the initial support level for AUD/JPY is located at 97.28, the low of September 24. Any follow-through selling below this level could expose 96.31, the low of September 3. The additional downside filter to watch is 96.00, the 100-day EMA, and the round mark. 

AUD/JPY daily chart