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With risk sentiment on the upswing and potential catalysts from Australia and China coming soon, this channel pattern on AUD/JPY is definitely one to watch!

Before moving on, ICYMI, we’ve started doing a Daily London Session Watch list! And today, we looked at a potential move in EUR/GBP ahead of the BOE monetary policy decision, so be sure to check that out. For all you traders out there who trade the London session, be sure to check out the site daily for the latest news updates and pairs that could be on the move for the session!

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 13291.95 +0.85%
FTSE: 7415.50 +0.25%
S&P 500: 3095.57 +0.60%
DJIA: 274743.88 +0.91%
US 10-yr 1.924% +0.112
Bund 10-YR -0.252% +0.071
UK 10-YR: 0.765% +0.048
JPN 10-YR: -0.081% +0.008
Oil: 57.12 +1.64%
Gold: 1516.20 +1.30%
Bitcoin: 9176.00 -1.69%
Etherium: 185.01 -3.21%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:

  • U.S. Consumer credit at 8:00 pm GMT
  • Japan Average cash earnings & household spending at 11:30 pm GMT
  • Reserve Bank of Australia Monetary policy statement at 12:30 am GMT (Nov. 8)
  •  Australia Home loans at 12:30 am GMT (Nov. 8)
  • China trade balance (tentative Nov. 8)

What to Watch: AUD/JPY

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

Risk-on traders are out in force today with more positive news coming from the U.S.-China trade war story, and with potential catalysts coming from Australia, China and Japan during the Asia session, it makes sense to check out AUD/JPY for possible moves ahead.

On the one hour chart above of AUD/JPY, we can see that the pair is in a short-term grind higher, forming a rising channel since the end of October. For Aussie bulls out there, if the fundamental data comes out in favor of the Aussie (e.g., positive China trade balance data, RBA lowers rate cut expectations in statement) the pair is likely to continue the grind higher. But with stochastic showing potential overbought conditions, it may be prudent to wait for a pullback to the area between the rising ‘highs’ pattern and the major psychological level of 75.00. Longing there gives your a better potential return-on-risk and a higher probability of success.

For the bears, a break below that support area mentioned above (roughly 74.40 – 75.00) would be your cue to look at a short play if we see weak Chinese trade data and/or a dovish RBA statement. This could draw in short-term momentum bears, especially if we’re surprised with negative development in the U.S.-China trade war front. A down move also plays into the longer-term traders hands given the longer-term downtrend, and if you’re looking for that kind of setup, be sure to check out Big Pippin’s technical analysis of the AUD/JPY daily chart!