AUDJPY Trade Setup – 3rd Feb

AUD/JPY is setting up as one of the cleaner, high-beta opportunities this week because it sits at the intersection of two powerful drivers: relative central-bank policy and global risk appetite. With the RBA’s tightening stance reinforcing yield support for the Australian dollar, and the yen continuing to behave as the market’s primary funding/hedge currency during swings in sentiment, AUD/JPY can move quickly when volatility rises. Add in a US macro backdrop distorted by shutdown-related uncertainty around data timing and expectations, and the result is a pair that tends to trend decisively when the rate-differential narrative and risk tone align. AUDJPY Trade Setup: Pair / Asset Bias & Entries Stop / Invalidation Targets Why A+ (fundamentals, technicals, sentiment) Price Action Driver Near-term catalysts (UK time) AUDJPY  LONG – Buy on pullback 108.70 – 108.90 or breakout/hold above 109.30 Below 108.10 (daily pullback failure); hard invalidation <107.90 T1: 109.80 T2: 110.80 – 111.20 Fundamentals: RBA hiking cycle reprices AUD higher; JPY pressured by domestic political/event risk & softer JPY demand backdrop. Technicals: strong trend with price pressing upper band / channel resistance zone 109.00 (bull trend, but manage “overbought” with pullback entry). (tmgmasia.com) Sentiment: risk tone firmer in Asia supports carry/pro-cyclical longs. Risk-on & rate differential (AUD rates) RBA follow-through / repricing (today); US shutdown headlines (all week); Wednesday 4th Feb: 13:15: ADP Employment Change 15:00: ISM Services AUDJPY Trade Setup – 3rd Feb Conclusion: For AUD/JPY, the goal is to stay aligned with the dominant drivers — RBA-led yield support and the prevailing risk regime — while executing with discipline around levels. This is a pair that can extend strongly when momentum takes hold, but it can also retrace sharply on sudden risk-off headlines or a fast shift in rate expectations, so invalidation must be treated as non-negotiable. If the structure holds, the outlined targets allow for a measured approach to scaling profits while keeping exposure to a broader continuation move. If invalidation triggers, we step aside and reassess rather than forcing a trade. Protecting downside and waiting for the next A+ alignment is part of maintaining consistency — especially in a week where headline flow can override short-term signals. This analysis is for informational purposes only and does not constitute investment advice. Trading involves risk; manage exposure accordingly. For similar FX Trade Setups please visit our FX Trade Ideas page. Please visit our Disclaimer page. Disclaimer Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. TerraBullMarkets.com does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets or any financial instrument involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TerraBullMarkets.com nor any of its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page. TerraBullMarkets.com and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. TerraBullMarkets.com and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted. The author and TerraBullMarkets.com are not registered investment advisors and nothing in this article is intended to be investment advice. TerraBullMarkets...