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A potentially big event ahead for the Australian dollar could change this slow grind higher in AUD/JPY into a strong short-term breakout play.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 13009.79 -1.71%
FTSE: 7301.51 -0.61%
S&P 500: 3114.17 -0.85%
DJIA: 27844.20 -0.74%
US 10-yr 1.828% +0.052
Bund 10-YR -0.279% +0.077
UK 10-YR: 0.747% +0.048
JPN 10-YR: -0.108% -0.005
Oil: 56.05 +1.60%
Gold: 1468.00 -0.32%
Bitcoin: 7315.46 -0.80%
Etherium: 148.60 +0.75%

Fresh Market Headlines & Economic Data:

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

  • Australia Current Account at 12:30 am GMT (Dec. 3)
  • Reserve Bank of Australia Interest Rate decision at 3:30 am GMT (Dec. 3)

What to Watch: AUD/JPY

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

For the first U.S. session watchlist post of the week, we’re checking out AUD/JPY ahead of the latest monetary policy and interest rate decision from the Reserve Bank of Australia. Like most other monetary statements from central banks, this is likely to be a market mover, but with expectations of the RBA holding at 0.75% at this meeting, any spike in volatility will likely be short-term.

On the one hour chart above of AUD/JPY, we can see the pair has been slowly grinding higher over the last week or so after bottoming out around 73.50. And during this move, the market managed to break above a minor resistance area around 74.25 and seems to be holding for now.

If you’re a bull on AUD/JPY, then the scenario to look out for later is the RBA holding off on rate cuts and giving us some positive comments on the economic outlook, which is a low probability situation at the moment given some recent weak economic updates like Australian manufacturing sentiment and building approvals seen earlier today.

If you’re a bear on AUD/JPY, a rate cut and/or dovish rhetoric from the RBA on Australia’s economy will like spark some Aussie selling, and if the U.S.-China trade story turns further negative (e.g., further retaliation against the U.S. Hong Kong bill support protesters), it’s likely we’ll get a momentum move to the downside, probably enough to break the rising ‘lows’ pattern, which could draw in more sellers for a swing position.