Today, we’re looking at a technical setup on AUD/JPY that could see some movement with events on the calendar from Australia and Japan ahead.
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a setup on USD/CHF ahead of the latest U.S. CPI update, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
DAX: 15150.22 +0.20%
FTSE: 7004.63 +0.82%
S&P 500: 4063.04 -2.14%
NASDAQ: 13031.68 -2.67%
US 10-YR: 1.701% +0.077
Bund 10-YR: -0.117% +0.012
UK 10-YR: 0.892% +0.005
JPN 10-YR: 0.079% +0.009
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Gold: 1,817.30 -1.02%
Bitcoin: $54,294.75 -4.22%
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Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
New Zealand Food Prices at 10:45 pm GMT
U.K. House Prices at 11:00 pm GMT
Japan Current Account, Bank Lending at 11:50 pm GMT
Australia New Home Sales at 12:00 am GMT (May 13)
Australia Consumer Inflation Expectations at 1:00 am GMT (May 13)
Japan Eco Watchers Survey at 5:00 am GMT (May 13)
What to Watch: AUD/JPY
On the one hour chart above, we’ve got AUD/JPY in a downward slope, echoing the risk-off sentiment we’re seeing in the markets this week.
Short-term, that trend lower is likely to continue given the escalated fears of accelerating inflation conditions, which could take AUD/JPY all the way to the major support area around the 84.20 handle. If so, is that a buying opportunity or will a breakdown come next?
Well, we don’t have major events on the forex calendar to likely fuel a strong break one way or another, but the upcoming Australian new home sales and consumer inflation expectations could be enough to at least keep volatility up. Maybe even to fuel a downside break if the Aussie data comes in weaker-than-expected.
If the Aussie data comes in stronger that forecast, and we see a broad shift in risk sentiment towards positive, then watch the 84.20 area for bullish reversal candles.
If those patterns appear, that would likely draw in short-term buyers, both looking to take profit from their shorts and/or fresh longs looking to play the longer-term trend higher.