AUD/JPY – Bullish Cup & HandleAUD/JPY is showing signs of a potential bullish reversal following an extended bearish trend. On the 1-hour timeframe, price has developed a well-defined Cup & Handle pattern, supported by bullish RSI divergence and a Fibonacci retracement setup.
The cup formation begins at Point A, where price established a significant swing low near 109.70 before gradually recovering towards Point B around 112.60, completing the rounded bottom structure.
Following the recovery, price encountered resistance at the neckline and started retracing, forming the handle of the pattern.
1. Fibonacci Retracement & Handle Formation
After reaching Point B, price experienced a sharp rejection from the neckline and retraced towards the 0.382 Fibonacci level, around 111.50.
The current price action suggests that buyers are attempting to defend this retracement area, with price recovering towards 111.80.
The Fibonacci retracement zone between 0.382 and 0.5, approximately 111.50–111.15, represents a potential support area for the handle formation.
As long as price maintains support within this region, the bullish continuation scenario remains technically viable.
2. RSI Divergence & Momentum Confirmation
The RSI previously developed a bullish divergence near the bottom of the cup, where price formed lower lows while RSI established higher lows, indicating weakening bearish momentum.
This divergence supported the subsequent recovery towards the neckline.
However, RSI also displayed a bearish divergence near Point B, where price pushed towards the neckline while RSI formed a lower high. This signaled weakening bullish momentum and contributed to the current retracement.
The RSI has now recovered towards the neutral 50 level, suggesting that selling pressure may be easing.
A sustained recovery above 50, followed by a move towards 60, would provide additional confirmation of improving bullish momentum.
3. Entry Strategy & Bullish Confirmation
Primary entry – Handle support
I am monitoring the 111.50–111.15 Fibonacci support zone for a potential bullish reversal.
A bullish rejection candle, higher low, or bullish engulfing formation within this region could provide an early entry opportunity.
Conservative entry – Neckline breakout
For stronger confirmation, I will wait for a decisive hourly candle close above the neckline resistance around 112.60.
A successful breakout followed by a retest of the neckline as support would strengthen the bullish continuation scenario and confirm the Cup & Handle pattern.
4. Profit Targets & Risk Management
My projected bullish targets are:
TP1: 113.12 – Initial resistance.
TP2: 114.23 – Lower boundary of the major resistance zone.
TP3: 114.90 – Upper resistance and projected pattern target.
The projected move towards 114.90 is based on the measured move of the Cup & Handle formation, extending the approximate depth of the cup above the neckline.
A sustained breakdown below the handle support would weaken the immediate bullish setup. A protective stop-loss should be positioned according to the selected entry, the confirmed handle low, and the trader's risk tolerance.
The key is to wait for bullish confirmation rather than anticipate the breakout.
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EURUSD: fix the range before you read the resultThe Federal Open Market Committee met on September 15 and 16, and its next scheduled meeting is October 27 and 28. Those two dates come from the committee's own published calendar, and they are the only fixed points in this note.
A common habit after a scheduled event is to redraw the reference range until the outcome looks obvious. That is hindsight wearing the clothes of analysis, and it feels like skill precisely because it always works.
Fix the reference before you read the result. On a four hour EURUSD chart, mark the high and the low of the last completed session that ended before the decision was released, then record the feed and the session timezone so another person can reproduce the same two levels from your description alone.
Now answer two questions in the order you wrote them. Where did the first completed candle after the release close relative to that fixed range? Where did the next completed candle close? A wick outside followed by a close back inside is a different observation from two consecutive closes outside, and collapsing the two into one story is where the record stops being useful.
If price crossed both boundaries inside a single candle, write the sequence down as unresolved. Choosing the boundary that supports a view you already held is not a reading of the chart.
This is an observation protocol, not a forecast of policy, inflation or the exchange rate, and one event never establishes an edge. Keep the observation separate from execution and from any profit or loss that follows.
Education only, not advice.
All figures use simulated capital only; no deposits, no client money. EURUSD: 1H Range Tightens Near the Lows While Daily Trend Stays (Based on the last closed 1H candle.)
Price
EURUSD trades near 1.1460 after a sharp decline from the 1.1650 area, followed by several sessions of consolidation at the lower end of that range.
Volume Sentiment
1H: Raw sentiment is hovering close to the zero line, showing no strong buyer or seller dominance. The Heikin Ashi line, however, crossed into the FUD zone two candles ago, pointing to an average seller lean beneath the surface.
1D: Both raw and Heikin Ashi sentiment have been trending down together. The Heikin Ashi line crossed below its lower boundary one candle ago, while raw sentiment has diverged slightly but remains close to its own lower boundary.
MACD
1H: The fast line crossed below the signal line four candles ago, and the histogram has been shrinking since, showing fading momentum.
1D: Both lines continue to decline, with the fast line now in negative territory and the histogram deeply negative.
Bollinger Bands
1H: The bands narrowed sharply following the recent drop. Price is trading at/below the midline, close to the lower band.
1D: Price broke below the midline earlier this week and is now trading at the lower band.
Short-term (1H) volatility has compressed into a tight range near the lower band, while the daily trajectory across sentiment, momentum, and volatility all continues to point lower. This is a divergence worth watching between short-term consolidation and the broader downward trend.
Not financial advice. This is for educational and informational purposes only.
Short
