AUD/JPY Price Forecast: Retains positive bias above 98.50 amid fiscal expansion bets

• AUD/JPY gathers strength to near 98.80 in Wednesday's early European session.
• The cross keeps the bullish view in the longer term, further upside looks favorable with bullish RSI indicator. 
• The immediate resistance level is seen at 99.50; the first downside target is located at 97.25.

The AUD/JPY cross extends its upside to around 98.80 during the early European session on Wednesday. The Japanese Yen (JPY) softens against the Australian Dollar (AUD) as conservative Sanae Takaichi was elected as Japan's Prime Minister, with traders betting her government could muddy the interest rate outlook and bring about a greater fiscal largesse.

Technically, the constructive 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. The upward momentum is supported by the 14-day Relative Strength Index (RSI), which stands above the midline near 55.0. This suggests bullish momentum in the near term. 

On the bright side, the first upside barrier for the cross emerges at 99.50, the high of October 14. Sustained trading above the mentioned level could pave the way to the 100.00 psychological level. A decisive break above this level could see a rally to the upper boundary of the Bollinger Band of 100.40.

On the downside, the initial support level for AUD/JPY is located at 97.25, the low of October 16. Any follow-through selling below this level could see a drop to 96.86, the low of October 2. The crucial contention level to watch is in the 96.50-96.45 zone, representing the 100-day EMA and the lower limit of the Bollinger Band.

AUD/JPY daily chart