AUD/JPY Price Analysis: Eyes significant gains amid a triangle breakout

The AUD/JPY pair has shown a decent upside in the early European session. The upside in the risk barometer is backed by the announcement of a relief package from Japanese Chief Cabinet Secretary Hirokazu Matsuno in which more than 2 trillion yen will be allocated for households to support them against rising prices.

Japanese administration and the Bank of Japan (BoJ) are focusing on the continuation of the expansionary policy to keep inflation near desired levels as a major contribution to the inflationary pressures is coming from higher import prices, not from the domestic forces.

The Australian Dollar is showing strength despite the Reserve Bank of Australia (RBA) having proposed a pause in the rate-hiking cycle from its April meeting. It seems that RBA policymakers are satisfied with a mere two-month of decline in Australian inflation.

AUD/JPY has climbed above the resistance-turned-support plotted from March 21 high at 88.48. The cross has also delivered a breakout of the Symmetrical Triangle chart pattern, which indicates a volatility expansion ahead.

The Australian Dollar would continue to find support from the 20-period Exponential Moving Average (EMA), which is hovering around 88.43.

Meanwhile, the Relative Strength Index (RSI) (14) is inch far from shifting into the bullish range of 60.00-80.00.

Investors would find an optimal buying opportunity near the 20-EMA around 88.43, which will drive the risk barometer towards March 20 high at 89.24 followed by the psychological resistance at 90.00.

In an alternate scenario, a south-side move below March 21 low at 87.71 would drag the cross toward March 20 low at 87.14. A break below the latter would expose the asset to a fresh annual low near 86.61, which is March 16 high.

AUD/JPY hourly chart