While AUD/JPY has been in a clear uptrend, the rally is now approaching a significant technical ceiling where sellers have previously stepped in. We see a compelling opportunity for a counter-trend short, betting that this resistance level will hold and that the current bullish momentum is showing signs of exhaustion.
This trade is for those watching for a market turn, offering a well-defined risk-to-reward setup for a swing position.
🤔 The "Why" Behind the Short Setup
đź“° The Fundamental Risk
The Australian Dollar is a "risk-on" currency, meaning it performs well when global markets are optimistic. The Japanese Yen, however, is a classic "safe-haven" asset that strengthens during times of uncertainty. With the upcoming high-impact Australian CPI data, any sign of economic weakness could disappoint the market, increase pressure on the RBA, and trigger a "risk-off" move that would benefit the Yen and send AUD/JPY lower.
đź“Š The Technical Ceiling
The chart tells a clear story. The price is currently testing a major resistance zone. Attempting to short near a strong ceiling like this provides a strategic entry to capture a potential trend reversal. We are essentially betting that the trend's multi-week momentum will stall and reverse from this key technical juncture.
âś… The High-Clarity SHORT Trade Setup
📉 Pair: AUD/JPY
👉 Direction: Short
⛔️ Entry: 96.716
🎯 Take Profit: 92.080
🛑 Stop Loss: 98.907
Rationale: This setup plays for a significant swing move. The wide stop loss is designed to withstand volatility from news events, while the deep take profit targets a full reversal back to major support levels seen earlier in the year.
This trade is for those watching for a market turn, offering a well-defined risk-to-reward setup for a swing position.
🤔 The "Why" Behind the Short Setup
đź“° The Fundamental Risk
The Australian Dollar is a "risk-on" currency, meaning it performs well when global markets are optimistic. The Japanese Yen, however, is a classic "safe-haven" asset that strengthens during times of uncertainty. With the upcoming high-impact Australian CPI data, any sign of economic weakness could disappoint the market, increase pressure on the RBA, and trigger a "risk-off" move that would benefit the Yen and send AUD/JPY lower.
đź“Š The Technical Ceiling
The chart tells a clear story. The price is currently testing a major resistance zone. Attempting to short near a strong ceiling like this provides a strategic entry to capture a potential trend reversal. We are essentially betting that the trend's multi-week momentum will stall and reverse from this key technical juncture.
âś… The High-Clarity SHORT Trade Setup
📉 Pair: AUD/JPY
👉 Direction: Short
⛔️ Entry: 96.716
🎯 Take Profit: 92.080
🛑 Stop Loss: 98.907
Rationale: This setup plays for a significant swing move. The wide stop loss is designed to withstand volatility from news events, while the deep take profit targets a full reversal back to major support levels seen earlier in the year.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.