After an Asia session drop, AUD/JPY has bounced back for a potential setup ahead of Australian and Japanese data.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on GBP/CHF ahead of U.K. employment data, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
|DAX: 13716.53 +0.49%
FTSE: 7388.49 -0.60%
S&P 500: 3374.34 -0.17%
DJIA: 29297.67 -0.34%
|US 10-yr 1.561% -0.027
Bund 10-YR -0.403% -0.004
UK 10-YR: 0.619% -0.024
JPN 10-YR: -0.041% -0.012
|Oil: 51.51 -1.04%
Gold: 1592.70 +0.39%
Bitcoin: 9753.50 +1.20%
Etherium: 269.84 +1.86%
Fresh Market Headlines & Economic Data:
- Empire State manufacturing index hits highest level in nine months
- Canadian manufacturing sales declined for the fourth consecutive month, down 0.7% to $56.4B in December
- Global dairy prices -2.9% since last read on Feb. 4
- German investor morale worsens on coronavirus fears – ZEW
- U.K. Employment Jumps as Economy Defies Brexit Political Turmoil
- Boris Johnson’s chief Brexit negotiator says Britain will never sign up to EU rules in a blunt warning to Brussels
- Oil drops below $57 on coronavirus impact and OPEC+ delay
- China races to contain job losses as coronavirus batters economy
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- U.S. Net Long-term Tic Flows at 9:00 pm GMT
- Japan Trade balance, Machinery orders at 11:50 pm GMT
- Australia Leading index, Wage price index at 12:30 am GMT (Feb. 19)
What to Watch: AUD/JPY
Checking out AUD/JPY today as the pair recovers from an early Tuesday drop, likely on rising global risk aversion sentiment as coronavirus fears flared up once again. This was sparked by Apple, who issued a revenue guidance warning overnight, evoking fears of a more significant impact from the coronavirus outbreak on the global economy.
This lead to a break of the rising lows on the on hour chart, as seen above, but the bulls stepped in to halt the decline around the 73.20 handle. The pair is now testing the broken minor support area around 73.50, which could draw in sellers looking for another opportunity to play the risk-off sentiment at a better price.
Be on the look out for bearish reversal patterns before considering a short play, and if the upcoming Australian data disappoints, then this pair could make a run for fresh break of today’s swing lows.
For the bulls, a turn in Coronavirus sentiment could halt the decline, as well as a big positive surprise from Australia’s upcoming leading and wages data. A break above 73.50 in the scenario could draw a further relief rally of short profit taking and/or fresh buyers who could shoot for the 74.00 handle, which is well with reach given the daily ATR of around 60 pips.