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Is that a fresh breakdown I’m seeing on AUD/JPY?

If risk-off flows carry on, we might just see a continuation of this drop!

Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Chinese economy grew by 4.8% in Q1 2022 vs. previous 4.0% expansion

Chinese retail sales slumped 3.5% year-over-year in March vs. expected 3.0% drop

China’s fixed asset investment jumped by 9.3% vs. projected 8.5% gain

Chinese industrial production increased by 5.0% vs. expected 4.0% pickup

China’s jobless rate rose from 5.5% to 5.8% in March

BOJ Governor Kuroda says weak yen benefits the Japanese economy

Macron projected to win French presidential runoff at 56% vs. Le Pen

Upcoming Potential Catalysts on the Forex Economic Calendar:

European markets closed for Easter Monday
RBNZ Governor Orr’s speech at 8:00 pm GMT
FOMC member Bullard’s speech at 8:00 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: AUD/JPY

AUD/JPY 1-hour Forex Chart

AUD/JPY 1-hour Forex Chart

Don’t look now, but this pair just fell through its ascending triangle support!

Could this mean that a selloff is in order?

When this kind of breakdown happens, it’s usually followed by a drop of the same height as the chart formation, which spans around 400 pips in this case.

However, technical indicators are saying otherwise. For one, the 100 SMA is above the 200 SMA to signal that buyers still have the upper hand.

Also, Stochastic is dipping into the oversold region, suggesting that sellers could use a break.

Does this mean that the downside move is a fake out?

If bullish pressure returns, AUD/JPY could still bounce back to the top of the triangle or even attempt a break higher. The pair is holding on to the 200 SMA dynamic support for now, and a bounce might be enough to confirm that buyers are in control.

Keep in mind that China just printed relatively upbeat economic data, which might be enough to keep the correlated AUD afloat, while BOJ head Kuroda continues to jawbone the yen.