AUD/JPY Strategy: Retest Quality Decides Trend or Range

Navigating the AUD/JPY pair in volatile markets requires a disciplined approach, especially when catalysts are stacked. Our playbook emphasizes discerning genuine market signals from noise by closely observing retest quality around critical technical levels.

AUD/JPY Market Snapshot & Session Insights

As of February 15, 2026, 09:00 UTC, the AUD/JPY reference mid stands at 109.412. This level will serve as a crucial benchmark for the upcoming trading sessions. Market participants should be mindful that significant catalysts can lead to rapid price movements, even gapping stops. Therefore, prudence dictates a reduction in trading frequency during such times.

Key session handover markers to watch include the Asia close/London open (07:45-08:30 London), London morning (09:00-11:30 London), and the New York open and morning (08:30-11:00 New York). A higher quality break often occurs when volatility compresses on the retest, and subsequent trading windows fail to reverse the move. The AUD/JPY price live will be closely monitored for these patterns.

Scenarios and Probability-Weighted Outlook

Our analysis outlines three probability-weighted scenarios for the AUD/JPY:

• Base Case (55%): Rotation inside 109.000-110.000. The best strategy here is to fade the edges back towards the 109.500 pivot, with invalidation clearly defined beyond these boundaries. The AUD/JPY chart live will be crucial for identifying these movements.
• Upside (15%): Acceptance above 110.000. This scenario requires compression on the retest, signaling potential for extension towards 110.500 and then 111.000. Invalidation would be a swift snap-back under 109.500 after the retest.
• Downside (30%): Pivot failure and acceptance below 109.000. A confirmed breach could lead to rotation towards 108.500 and potentially 108.000, contingent on confirmation in subsequent liquidity windows. Reclaiming and holding 109.500 would invalidate this bearish outlook. The AUD JPY price in real-time will dictate the immediate response.

Trade Setup Ideas for the AUD/JPY

For potential execution, we are considering specific setups, but these remain on a watchlist:

• Break-and-Retest: Only engage after clear acceptance beyond 110.000 (or below 109.000) and a validated retest. Stop-loss placement should be beyond the established boundary.
• Failed-Break Fade: If a break quickly repairs, fade the move back towards 109.500, with invalidation beyond the failed edge. Keeping an eye on the AUD JPY realtime data is vital here.
• Pivot Pullback: In an above-pivot regime, consider buying controlled pullbacks towards 109.500, provided the pullback exhibits compression. Place stops just beyond the structure. The AUD to JPY live rate is essential for precise entries.

Drivers and Transmission Mechanisms

Figure levels often act as magnets, attracting hedging and stop-loss orders. The initial touch of these levels serves as a probe; the retest then either confirms or rejects the move. Liquidity remains a key constraint, with early London trading often exaggerating moves, and the first New York hour determining whether London's boundaries hold. Risk management should always take precedence over narrative in headline-driven markets. Allowing levels and acceptance to define whether a move is genuine information or merely noise is critical. The AUD JPY live chart can provide immediate visual confirmation of these dynamics. When different clusters of indicators provide conflicting signals, it's prudent to downgrade the probability of a sustained trend and default to range-trading tactics.

Execution Framework and Microstructure Notes

Our execution framework involves identifying the current regime using the 109.500 pivot, allowing the market to test boundaries, and entering on the retest rather than the initial break. Stops should be placed beyond the structure and sized appropriately, with partial profit-taking at the first target. On Sundays, widened spreads warrant trading smaller sizes or stepping aside entirely, prioritizing confirmation over conviction. Cluster confirmation amplifies trend probability when the USD complex shows mixed signals, but only after a protected retest. The AUDJPY price live will be paramount for these decisions. Volatility regime filters confirmation thresholds, especially when stops cluster near figures, advocating for pivot acceptance as the regime line. Furthermore, given that the Australian Dollar Japanese Yen live quotes can be affected by thinly traded conditions, we generally prefer limit entries at established edges rather than chasing fast moves, as volatility regime often clarifies the execution edge when Asia prints a false break.

Levels Map and Range Bands

The pivotal level (regime line) is 109.500. A critical figure magnet to watch is 109.000. Resistance levels are laddered at 110.000, 110.500, and 111.000 (with further resistance at 111.500/112.000). Support levels are found at 109.000, 108.500, and 108.000 (with additional support at 107.500/107.000). The general rule is: buy dips above the pivot until it fails, and sell rallies below the pivot until it is reclaimed. Retest entries are always preferred. The default trading band is 109.000 to 110.000, where two-way flow and mean reversion are expected. Near 109.000, the market can pin before releasing; therefore, avoid first-touch entries and wait for a protected retest or a clean repair.

Bottom Line and Risk Notes

Treat 109.500 as the decisive regime line and 109.000 as a significant magnet. A true trend confirmation requires acceptance above or below these levels, followed by a protected retest. If confirmation is lacking, consider fading back to the pivot and reducing overall risk exposure. It is crucial to remember that all scenarios are conditional and can be rapidly invalidated by new market information. Lastly, stop clustering can severely worsen risk-adjusted returns, particularly when combined with an Asia session false break; taking partials at the first target helps mitigate this. The AUD JPY chart live will provide constant updates on these critical levels.

Execution and Handover Nuances

Order-book sensitivity anchors entry quality when spreads widen, particularly in early Asia. This means avoiding the temptation to widen stops after invalidation. Retest quality ultimately filters the execution edge; when volatility expands but lacks follow-through, avoid chasing gaps and instead, wait for repair or protection. During session handovers, mean reversion can downgrade trend probability if the USD complex is mixed, emphasizing the need to avoid adding size mid-range. The fix approaching often validates trend execution, but again, refrain from adding size mid-range. Carry selectivity amplifies execution edge when correlated crosses align, further underscoring the importance of pivot acceptance as the regime line.

Related Reading

• AUD/JPY Trading Playbook: Navigating 109.500 Pivot on Macro Shifts