AUD/USD and AUD/JPY Technical Analysis Summary

As of February 19, 2025, the Australian dollar (AUD) is experiencing an unprecedented period of low volatility, particularly in the AUD/USD pair, which is on track for its smallest weekly range this century. The current high-to-low range stands at just 0.62%, a notable statistic given the recent rate cut by the Reserve Bank of Australia (RBA) and the absence of significant tariff-related news.

AUD/USD Technical Analysis

The AUD/USD pair has shown a tight trading range, influenced by two preceding bullish weeks following a rebound from tariff concerns. Resistance levels have been identified around the August low and the value-area low (VAL) from the Q4 decline. The 20-week Exponential Moving Average (EMA) is positioned at 0.6371, which may act as a cap on any potential gains.

Despite the current resistance, a bullish flag pattern is forming on the 4-hour chart, suggesting a potential for upward movement. The analysis indicates that, barring a significantly negative jobs report, dips in the AUD/USD are favored in the near term, especially with a rising AU-US 2-year yield spread supporting the bullish outlook.

AUD/JPY Technical Analysis

In the case of AUD/JPY, a potential bull flag is also forming on the daily chart, although it deviates from classical technical analysis rules, as such patterns are typically expected during strong uptrends. The analysis acknowledges a recent false break of a bullish pinbar, which may indicate a reversal opportunity. Prices are currently above the 10-day EMA and the weekly pivot point, but caution is advised as there may be another downward movement before a potential bullish setup.

Should the employment report yield positive results, it could provide a boost to the AUD/JPY, with conservative upside targets set around the 97 handle and further highs near 97.20. A break above this level would bring the weekly R1 pivot into focus near the 89 handle.

Overall, the technical outlook for both AUD/USD and AUD/JPY suggests a cautious bullish sentiment, with traders advised to monitor upcoming economic data closely for potential market movements.