AUDJPY is retesting a broken downside resistance 91. A confirmed break above this resistance could lead to a substantial upside extension, but we may expect also a new swing down for now.
Only a confirmed break above 92 will lead to an extension higher and a continuation above 95 to test the 100 key level for this year.
Any short-term confirmed break below 88.20 would lead to a bearish swing lower to 85.40 again, for which we give a little more weight than an upside break above 91.
This could be a medium-term low-risk short trade, but we reserve the right to switch to a long trade in case of a break above 92. Price action positioning and a near-strong resistance with a possible H&S formation (usually bearish) give a short trade a greater probability.
You can take the short trade here with the stop loss just above 91.50 as we see a higher probability of a swing reversal lower. By placing this trade your RR ratio is above 2. If you are stopped, you can reverse your trade to a long trade, especially in the case of a confirmed break above 92.
