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Will the upcoming Australian jobs update turn the range in AUD/JPY into a news breakout play?

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at the downtrend bounce in GBP/AUD, 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: 15146.87 -0.34%
FTSE: 7130.23 -0.23%
S&P 500: 4350.65 -0.24%
NASDAQ: 14465.92 -0.14%
US 10-YR: 1.572% -0.033
Bund 10-YR: -0.093% +0.004
UK 10-YR: 1.138% -0.013
JPN 10-YR: 0.093% +0.004
Oil: 80.51 -0.01%
Gold: 1,761.20 +0.31%
Bitcoin: $55,070.75 -4.21%
Ether: $3,475.25 -1.14%
Cardano: $2.12 -0.60%

Fresh Market Headlines and Economic Data:

S&P 500 snaps three-day losing streak as investors assess earnings, Fed’s next move

Fed says it could begin ‘gradual tapering process’ by mid-November

U.S. consumer prices rise more than expected as energy costs surge

U.S. 2021 crude output seen falling more than previously forecast – EIA

U.S. becomes largest bitcoin mining center after China crackdown

U.S. COVID-19 vaccine rates up thanks to mandates; cases and deaths down

G20 finance chiefs back tax deal, pledge to sustain recovery, watch inflation

FDA scientists strike favorable tone on J&J Covid booster shots ahead of vote this week

Bank of England ends closed-door policymaker briefings with banks

Global deaths at lowest level in nearly 1 year: WHO

Upcoming Potential Catalysts on the Economic Calendar

RBA Debelle speech at 10:00 pm GMT
Fed Bowman speech at 12:00 am GMT (Oct. 14)
Australia Employment Rate at 12:30 am GMT (Oct. 14)
Chinese Inflation at 1:30 am GMT (Oct. 14)
Japan Industrial Production at 4:30 am GMT (Oct. 14)
Spain Inflation at 7:00 am GMT (Oct. 14)
Bank of England Tenreyro speech at 10:10 am GMT (Oct. 14)

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: AUD/JPY

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

Today, we’re looking at the simple, yet potent news straddle setup ahead of a top tier catalyst from Australia.  The idea is that when a market’s volatility dims ahead of a major news event or data point, price action will explode (potentially in one direction) after the event/data release. That’s what we’ve got with AUD/JPY going into consolidation mode after a strong run up in October, that could potentially get moving again with the release of the latest Australian jobs data.

On the one hour chart above, we can see AUD/JPY ranging roughly  between the 83.00 – 84.00 handles over the past two sessions, and if we see surprise data from Australia then the market could break and pick up momentum in either direction.

Expectations are for Australia’s job update to disappoint once again with an expected net loss of 134K jobs in September. If so, that would be inline with recent data that’s shown weakness, likely due to the recent lockdowns to battle the pandemic in Australia. This could potentially lead to a short-term selloff in AUD/JPY, which could draw in momentum sellers if AUD/JPY does sustain a break below the 83.00 handle.

Of course, if the data comes out better-than-expected, a possibility as signaled by the employment component of the latest manufacturing PMI surveys, then an upside break in AUD/JPY may be in the cards. But keep in mind that we saw a surprise run higher in AUD/JPY over the past few sessions, so even with good news, we could see some profit taking on the event in the short-term.