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AUD/JPY has been rangebound throughout the month of June, but with Australian and Japanese data ahead, as well as a highly anticipated Federal Reserve statement tomorrow, this range may not hold.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a textbook trend retracement setup on USD/CAD, 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: 15729.52 +0.36%
FTSE: 7172.48 +0.36%
S&P 500: 4246.59 -0.20%
NASDAQ: 14072.86 -0.71%
US 10-YR: 1.491% -0.01
Bund 10-YR: -0.231% -0.002
UK 10-YR: 0.769% +0.008
JPN 10-YR: 0.055% +0.021
Oil: 72.29 +1.98%
Gold: 1,860.20 -0.30%
Bitcoin: $40,089.64 +0.95%
Ethereum: $2,534.55 -0.15%

Fresh Market Headlines & Economic Data:

S&P 500 and Nasdaq slip from their records ahead of key Fed meeting

U.S. Producer prices climb 6.6% in May on annual basis, largest 12-month increase on record

Senators face roadblocks to passing bipartisan U.S. infrastructure plan as opposition mounts

U.S. retail sales take step back as spending pivots to services, trend remains strong

U.S. homebuilder confidence falls to 10-month low in June

Oil up nearly 2% to multi-year highs on demand expectations

Lumber prices sink below $1,000 for the first time since March, now down 40% since May’s record high

Gold price tumbles as markets eye Fed’s inflation stance, tapering, and dot plot comments

Upcoming Potential Catalysts on the Economic Calendar

New Zealand Current Account at 10:45 pm GMT
Japan Trade Balance, Machinery Orders at 11:50 pm GMT
Australia Leading Index at 1:00 am GMT (June 16)
UK Inflation Rates at 6:00 am GMT (June 16)
China Unemployment Rate, Retail Sales, Industrial Production at 7:00 am GMT (June 16)
U.K. House Price Index at 8:30 am GMT (June 16)
Euro Area Wage Growth at 9:00 am GMT (June 16)

What to Watch: AUD/JPY

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

With the upcoming, highly anticipated monetary policy statement from the Federal Reserve tomorrow, its likely most financial markets will remain in a holding pattern. But if there’s any chance of some volatility picking up, it may be with AUD/JPY.

We could see a reaction to a somewhat busy economic calendar in the upcoming Asia session with events from both Australia and Japan. We’ve also economic updates from China, which could not only influence the broad financial markets, but the Aussie as well given the close trade relationship between China and Australia.

Until the Fed meeting, we’ll be on the look out for a pick up in volatility off of the Australia / China updates.  And if there aren’t any major surprises, the best setups likely reside in watching the top of the range for bearish reversal patterns and quick pips, and the bottom of the range for bullish reversal patterns and quick pips.

If there’s no action until the Fed meeting, then the setup to watch out for is a potential range break as any surprise from the Federal Reserve’s statement would likely get all financial markets moving.  This is especially the case if they deviated from expectations that they will still consider recent upside inflation surprises as transitory, and/or a change in the dot plot that shows a potential monetary policy move earlier than the beginning of 2023.