AUDJPY Could Be Ready for Another Leg LowerAUD/JPYOANDA:AUDJPYEdgeTradingJourneyAUDJPY continues to respect its broader bearish structure, and despite reaching an important daily support area, I still believe sellers maintain the upper hand. After rejecting the 112.70–113.50 supply zone, price resumed its decline and is now testing a confluence area formed by a previous daily swing low and an unfilled Fair Value Gap. This is the first location where buyers could attempt to slow the decline, making the current reaction particularly important. Technical Outlook The overall market structure remains bearish. Lower highs and lower lows are still intact, and price continues to trade inside the descending channel that has guided the move since the beginning of June. For me, there are two possible scenarios. Bearish Scenario (Preferred) If this daily support fails to hold, I will be looking for continuation toward: • 110.80 • 110.00 • 109.00 A confirmed daily close below the current support would increase the probability of another impulsive move lower. Bullish Scenario Should buyers defend this area, a corrective rally toward 112.70–113.50 could develop. However, unless market structure shifts back to bullish, I would simply consider this a retracement into premium pricing where sellers could regain control. Commitment of Traders (COT) The latest COT report strengthens my bearish bias. On the Australian Dollar, large speculators reduced long exposure while increasing shorts, resulting in a more negative net positioning. The Japanese Yen, although still structurally net short, showed signs of short covering, suggesting bearish pressure on JPY is gradually easing. Relative positioning therefore continues to favor AUD weakness against JPY. Retail Sentiment Current retail positioning shows approximately 55% of traders are long AUDJPY. Although this is not an extreme imbalance, retail traders remain slightly biased toward buying the decline, which offers a modest contrarian argument supporting further downside. Seasonality Seasonality is the only factor providing a slightly mixed picture. Historically, June has been modestly supportive for the Australian Dollar, while recent seasonal data suggests a relatively stronger Japanese Yen. Overall, seasonality is largely neutral and does not outweigh the current technical and positioning evidence. My Trading Plan At this stage, I am not interested in chasing price lower directly into support. Instead, I want to see one of two confirmations: • a clean daily breakdown followed by lower timeframe confirmation; • or a corrective rally back into premium supply before looking for fresh selling opportunities. As long as price remains below 112.70, I continue to favor the bearish side.