The Trading Desk
AUD/JPY is trading around 114.11 at the time of writing, having pulled back from session highs near 114.57 during the European morning. The daily chart presents a picture that remains constructive on balance — the pair has extended a multi-week advance from the 111.20 area and is holding broadly above the cluster of prior reaction zones that defined the mid-July consolidation phase.
The structure story over the past month is one of deliberate, staircase-style appreciation. Price spent the better part of early-to-mid July compressing between 111.20 and 112.80, with the 111.21 prior reaction zone absorbing selling pressure on at least three separate occasions. The breakout came decisively around 14 July, when a strong daily close above 113.00 opened the path towards the 113.65–113.88 area — itself a prior reaction zone that was subsequently cleared. The pair then pushed through 114.00 on 20 July and has spent the last eight sessions consolidating at elevated levels, with daily closes consistently above 114.10. That persistence above prior breakout territory is characteristic of a market digesting gains rather than reversing them. The 113.20 prior reaction zone now represents the first meaningful structural reference below current price, with 112.85 offering a secondary layer of support should conditions deteriorate more materially.
On the H1 chart, today's price action tells a more cautious intraday story. After holding in a tight band between roughly 114.39 and 114.57 through the Asian session and early European hours, the pair has slipped in the past two hours, printing a session low just below 114.04 in the 15:00 candle. That move has brought price back to test the 114.10 area, which sits just beneath the prior reaction zone at 114.33. The intraday structure has softened, with lower highs visible across the last three H1 candles, suggesting some near-term distribution. Whether this represents a routine pullback within the broader uptrend or something more sustained will likely depend on tonight's Australian data.
The calendar is the dominant consideration for the remainder of the session. Australian CPI figures — both headline monthly and year-on-year, alongside the Trimmed Mean reading — are due at 21:30 UTC, and all three carry high-impact designations. A hotter-than-expected inflation print would likely reinforce expectations for a more cautious Reserve Bank of Australia, which could provide meaningful support to the Australian dollar. A softer set of readings, by contrast, could amplify the current intraday pullback. The BOJ Core CPI reading due at 01:00 UTC carries low-impact status but is worth monitoring given the yen's sensitivity to any shift in Bank of Japan narrative.
The bullish read on the daily chart would come under question on a daily close beneath the 113.20 prior reaction zone. A failure to reclaim 114.33 on the H1 timeframe following the CPI release would suggest the intraday tone remains cautious, though it would not in isolation alter the broader structural picture.
This is editorial analysis, not financial advice. Trading involves substantial risk of loss.