AUDJPY has successfully broken out of a long-standing descending trendline on the daily timeframe, signaling a potential trend reversal after a prolonged bearish phase. This breakout was followed by a classic retest, where price pulled back to validate the previous resistance line now acting as new support.
Key Technical Observations:
Bullish Scenario:
Alternative (Bearish) Scenario:
Technical Context:
This setup is based on trendline breakout and retest, where a break and successful retest of a long-term descending trendline often leads to a bullish continuation. In essence, the structure of the chart reflects a potential trend reversal.
Key Technical Observations:
- The trendline, connecting multiple swing highs since late 2023, has been clearly violated to the upside.
- A minor consolidation followed the breakout, which now appears to be testing the broken trendline.
- The pair is forming higher lows, suggesting bullish intent and buyer interest on the retest.
Bullish Scenario:
- Entry Zone: Around 92.00–92.50, during or after the retest confirmation.
- Target 1: 95.00 (previous swing high)
- Target 2: 96.68 (Fibonacci extension and prior horizontal resistance)
- Target 3: 101.37 (major resistance from late 2023)
- Stop Loss: Below 91.20 or under the retest low (safe zone: around 90.80).
Alternative (Bearish) Scenario:
- If the price fails to hold above the broken trendline and closes below 91.00, the breakout could be a false move.
- In that case, downside pressure may push the price back toward 88.14 support.
Technical Context:
This setup is based on trendline breakout and retest, where a break and successful retest of a long-term descending trendline often leads to a bullish continuation. In essence, the structure of the chart reflects a potential trend reversal.
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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.