AUDJPY at Exhaustion Highs Risk Barometer Turning at 111.47Australian Dollar/Japanese YenFX:AUDJPYultreosforexAUDJPY has pushed into a clean liquidity shelf at 111.47 and stalled almost on cue. After a strong impulsive leg higher, momentum is now compressing right beneath prior highs, and short-term structure is starting to roll over. This is the kind of zone where trends either accelerate or reverse sharply — and given the macro backdrop, I’m leaning toward a corrective downside phase rather than continuation. This pair is not just another cross. It’s one of the clearest real-time gauges of global risk appetite. When AUDJPY hesitates at highs, I pay attention. Current Bias: Bearish (Corrective Pullback Likely) Price has rejected from the 111.47 high and is now forming lower intraday highs beneath resistance. Momentum has shifted from expansion to compression. Unless we see a decisive break and hold above 111.50, the structure favors a retracement toward deeper support. The impulsive leg higher looks extended, and exhaustion signals are building. Key Fundamental Drivers 1. Japan Yield Normalization Japanese yields have been gradually rising, and normalization expectations continue to build. That reduces the attractiveness of carry trades like AUDJPY. 2. Fragile China Growth Outlook AUD remains highly exposed to China demand and global growth sentiment. PMIs remain uneven and lack strong acceleration. 3. Risk Sentiment Plateau Equities have stabilized rather than accelerated. Without a fresh risk-on catalyst, high-beta crosses like AUDJPY struggle to sustain upside momentum. Macro Context Interest Rate Expectations: The Fed remains cautious due to sticky inflation. Rate cuts are not aggressively priced. Meanwhile, Japan’s yield curve dynamics are shifting upward gradually. Economic Growth Trends: US growth remains resilient. China growth remains fragile. Australia’s outlook is tied to global commodity demand rather than domestic outperformance. Commodity Flows: Iron ore and industrial demand flows matter more for AUD than oil does. There is no strong commodity impulse currently driving aggressive AUD upside. Geopolitical Themes: Any geopolitical flare-up strengthens JPY via safe-haven demand. Risk markets are stable but not euphoric. Net macro tone: Moderately risk-sensitive, not strongly risk-on. Primary Risk to the Trend A renewed equity breakout could quickly invalidate the bearish view. If global indices push higher and volatility compresses further, AUDJPY could retest and break above 111.47. Additionally, a dovish shift from the Bank of Japan would weaken JPY and support continuation higher. Most Critical Upcoming News/Event US Core PCE Japan policy communication China PMI releases These will directly impact risk appetite and yield spreads. Leader/Lagger Dynamics AUDJPY is a leader in global risk sentiment among FX pairs. When it turns lower, equities often follow. When it breaks out, it confirms risk acceleration. It does not follow USD directly — it responds to global growth and volatility flows. If AUDJPY breaks down cleanly, NZDJPY and equity indices often echo the move. Key Levels Support Levels: 109.80 (near-term structure support) 108.90 (mid-structure demand) 107.90 (major support zone and projected target) Resistance Levels: 110.90 (minor intraday cap) 111.47 (major liquidity high) Stop Loss (SL): Above 111.70 (clean breakout and hold invalidates bearish structure) Take Profit (TP): Primary: 107.90 Extended: 106.80 if downside momentum accelerates Summary: Bias and Watchpoints Bias is bearish while price remains below the 111.47 high. The structure shows rejection at a clear liquidity zone, and the macro backdrop does not strongly support sustained risk expansion. Rising Japan yields and fragile China growth keep AUDJPY vulnerable to pullbacks. Stop above 111.70 protects against a breakout continuation. Primary target sits at 107.90, with potential extension lower if risk sentiment deteriorates. The key watchpoints are US inflation data and Japan policy signals. If this pair rolls over decisively, it likely leads broader risk markets lower.