AUDJPY Momentum Weakens, Sellers Eye Deeper PullbackAustralian Dollar/Japanese YenFX:AUDJPYultreosforexAUDJPY has lost steam after a strong recovery rally, with sellers now pressing back below trendline support. The recent rejection near 98.40 signals exhaustion, and the pair looks set for a corrective leg lower toward key support zones. Unless buyers reclaim higher ground quickly, the near-term risk is skewed to the downside. Current Bias Bearish – price action shows a breakdown from recent upward momentum, with downside targets opening below 97.10. Key Fundamental Drivers RBA Policy: Australia’s central bank remains cautious with no immediate tightening bias, limiting AUD support. BOJ Policy: Still ultra-loose but rising JGB yields and quiet speculation about adjustments give JPY some underlying support. Commodities: Weakness in iron ore and concerns around Chinese growth cap AUD upside. Macro Context Interest Rates: RBA is holding rates steady, while markets anticipate the Fed and ECB easing earlier than BOJ. Yield differentials still favor AUDJPY upside, but recent data has weakened AUD’s momentum. Economic Growth: Australia’s growth is slowing; Japan is stable but not accelerating, making yield spreads the main driver. Geopolitics: Trade tensions and tariff-related uncertainty push investors toward JPY during risk-off episodes, undermining AUD. Primary Risk to the Trend A rebound in Chinese demand or a risk-on rally in equities could boost AUD and derail the bearish setup. Most Critical Upcoming News/Event Australian retail sales and CPI updates Japanese inflation data China PMIs for growth signals impacting AUD Leader/Lagger Dynamics AUDJPY is a lagger compared to USDJPY and EURJPY, which tend to set the tone for yen pairs. It is also influenced by AUDUSD moves, making it sensitive to Chinese and commodity-linked headlines. Key Levels Support Levels: 97.10, 96.29 Resistance Levels: 97.90, 98.40 Stop Loss (SL): 98.72 (above recent highs) Take Profit (TP): 97.10 (first target), 96.29 (secondary target) Summary: Bias and Watchpoints AUDJPY is turning bearish after losing momentum at 98.40, with sellers eyeing 97.10 and 96.29 as key downside targets. A stop above 98.72 helps protect against sharp rebounds, while risk sentiment and China data remain the main watchpoints. The pair is more of a lagger, following broader yen moves and AUD commodity flows, so traders should watch USDJPY and AUDUSD closely for signals.