• AUD/JPY retraces from 96.06 to 94.67, influenced by central banks' focus on high inflation and a sour market mood.
• The pair has fallen inside the Ichimoku Cloud, suggesting potential further downside with first support at the Kijun-Sen at 94.43.
• The short-term outlook is bearish, but an upward correction towards 94.88 is possible before extending losses past 94.53 to 94.00.

The AUD/JPY retraces from weekly highs of 96.06 extended its losses past the 95.00 figure, spurred by a sour market mood, as global central banks remain focused on tackling sticky high inflation. Hence, the pair dropped 1% or 95 pips on Thursday, and as the Asian session commences, it hovers around 94.67 flat.

The daily chart depicts the pair as neutral biased, but the AUD/JPY has fallen inside the Ichimoku Cloud (Kumo), which could open the door for further downside. The cross-currency pair first support would be the Kijun-Sen at 94.43, followed by an upslope support trendline at 94.30. Once cleared, the next support would be the Senkou Span B at 93.93, followed by the bottom of the Kumo at 93.80.

Short-term, the AUD/JPY pair is in a downtrend, below the Kumo, with price action below the Kijun and Tenkan-Sen lines, respectively. At the same time, the Chikou Span is also below the Kumo and price action, meaning the pair is bearish-biased. However, recent price action suggests an upward correction could be on the cards, with the pair set to edge towards the 50% Fibonacci retracement at 94.88. Once reached, the pair could extend its losses past the September 21 low of 94.53, followed by the 94.00 figure.

AUD/JPY Price Action – Hourly chart

AUD/JPY Key Technical Levels