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!
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Fresh Market Headlines and Economic Data:
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)
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What to Watch: AUD/JPY
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.