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AUD/JPY hits the top of our short-term watchlist today as volatility may pick up and we see an opportunity to play the longer-term slow trend higher.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a channel pattern on EUR/USD, so be sure to check that out to see if there is still a potential play!

Intermarket Update:


Equity Markets Bond Yields Commodities & Crypto
DAX: 15677.15 -0.10%
FTSE: 7077.22 +0.12%
S&P 500: 4226.52 -0.08%
NASDAQ: 13881.72 +0.49%
US 10-YR: 1.569% +0.009
Bund 10-YR: -0.196% +0.001
UK 10-YR: 0.815% +0.001
JPN 10-YR: 0.076% -0.005
Oil: 69.20 -0.60%
Gold: 1,901.80 +0.51%
Bitcoin: $35,427.25 -0.94%
Ethereum: $2,710.70 +1.35%

Fresh Market Headlines & Economic Data:

Dow falls more than 100 points to start the week, S&P 500 struggles to reach new high

The Fed is in early stages of a campaign to prepare markets for tapering its asset purchases

Rich nations back deal to tax multinationals

US oil hits $70 for the first time in nearly three years

In April, consumer credit increased at a seasonally adjusted annual rate of 5.3%

U.S. consumers sour on housing market’s buying conditions

Germany factory orders drop after mounting supply shortages

U.K. Hospitality industry warns 500,000 jobs are at risk

El Salvador looks to become the world’s first country to adopt bitcoin as legal tender

Square will invest $5 million to build solar-powered bitcoin mining facility


Upcoming Potential Catalysts on the Economic Calendar

Japan Average Cash Earnings at 11:30 pm GMT
Japan GDP, Current Account at 11:50 pm GMT
Australia New Home Sales at 12:00 am GMT (Jun. 8)
Australia Business Confidence at 1:30 am GMT (Jun. 8)
Japan Eco Watchers at 5:00 am GMT (Jun. 8)
Germany Industrial Production at 6:00 am GMT (Jun. 8)
Euro Area Employment Change, GDP at 9:00 am GMT (Jun. 8)
Germany ZEW Economic Sentiment at 9:00 am GMT (Jun. 8)

What to Watch: AUD/JPY

AUD/JPY 1-Hour Forex Chart
AUD/JPY 1-Hour Forex Chart

On the one hour chart above of AUD/JPY, we can see market is currently in rangebound mode, which actually goes back for a while. On the higher time frames, the pair has been in a slow grind higher since roughly February with volatility trending lower with each passing month.

So with that longer-term context in mind, this pair is one to watch for a potential short-to-medium term buying opportunity if the market dips to the previous support area. It could be in the process of topping out at the moment as resistance is forming once again at the 85.00 major psychological level, so a dip may not be to far away.

We may get help from a somewhat busy Asia session calendar, filled with mid-tier economic events to potentially get the pair moving. The most notable may be Japan’s GDP update or Australia’s business confidence update, but it’s likely there won’t be any massive moves without a massive surprise to the data or a surprise news event.

And if the pair doesn’t dip before the event releases, then we’ll be on the lookout for an upside break of the resistance area around 85.00. If the market can break above and create a break-n-retest pattern at 85.00, then a long position is sometime to consider if Australian data is positive and/or broad global risk sentiment is leaning positive on the session.