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With a lack of major catalysts schedule for the rest of the Monday session, we’re checking out AUD/JPY to play today’s overall gloomy sentiment.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/NZD as it hovers at its ascending channel support, so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 13547.72 -0.01%
FTSE: 7605.76 -0.60%
S&P 500: 3321.99 -0.23%
DJIA: 29266.94 -0.28%
US 10-yr 1.774% -0.061
Bund 10-YR -0.246% -0.031
UK 10-YR: 0.634% -0.016
JPN 10-YR: 0.001% -0.01
Oil: 58.50 -0.07%
Gold: 1555.90 -0.28%
Bitcoin: 8654.79 +0.14
Etherium: 168.67 +1.45%

Fresh Market Headlines & Economic Data:

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

  • Australia Westpac Consumer confidence at 11:30 pm GMT

What to Watch: AUD/JPY

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

On the one hour chart above of AUD/JPY, we can see the market reversed back to the downside at a minor level of interest (around 75.60) that was recently played both support and resistance this month. Today, it looks like resistance and it lines up with the falling ‘highs’ pattern going back a few sessions, making this a high probability of a legit reversal point.

Looking ahead, with a lack of any major catalysts ahead, this setup plays well with the current environment of negative risk sentiment that has flared today due to the rising Coronavirus fears coming out of Asia. This has pushed the Aussie to be the worst performer among the majors for the session, momentum that may continue to carry through the next Asia trading session if we don’t get hit with a surprise risk-on news event.

So, if you’re inline with this bearish framework on AUD/JPY, shorting at current levels up to the minor level of interest is a viable entry strategy, but the better potential return-on-risk lies in waiting for a retest of 75.60. With a daily ATR of around 55 pips, the next support level at the psychological level of 75.00 is reachable goal for the session if volatility stays bid.