Partner Center Find a Broker

Price action in AUD/JPY has been consolidating over the past few weeks, and with quite a few potential catalysts from Australia, China and Japan ahead, we could see a short-term break.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12245.77 +1.29%
FTSE: 6231.98 +1.18%
S&P 500: 3039.36 +1.01%
DJIA: 25458.00 +1.77%
US 10-yr 0.64%  +0.002
Bund 10-YR -0.472% +0.007
UK 10-YR: 0.162% -0.01
JPN 10-YR: 0.01% +0.003
Oil: 38.90 +1.07%
Gold: 1783.40 +0.17%
Bitcoin:9072.04 -0.25%
Ethereum: 223.15 -0.39%

Fresh Market Headlines & Economic Data:

U.S. pending home sales jump a record 44.3% in May

China to impose tit-for-tat visa restrictions on US officials over Hong Kong

Oil mixed on improving economic data, uptick in virus cases

Canadian building permits issued in May bounced back 20.2% to $7.4B, following declines of 13.4% in March and 15.4% in April.

Canadian Industrial Product Price Index rose 1.2% in May; The Raw Materials Price Index increased 16.4%

Expected German inflation rate for June 2020: +0.9% y/y, +0.6% m/m

Flash estimate of the Spanish Consumer Price Index (CPI): -0.3% in June

UK mortgage approvals slump to new record low – BoE

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

Fed Williams speech at 11:30 pm GMT
Japan Unemployment Rate at 11:30 pm GMT
Japan Industrial Production at 11:50 pm GMT
China Manufacturing & Services PMI at 1:00 am GMT (June 30)
Australia Private Sector Credit at 1:30 am GMT
RBA Debelle speech at 2:30 am GMT
Japan Housing Starts, Construction Orders at 5:00 am GM

What to Watch: AUD/JPY

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

On the hourly chart above, we can see that volatility in AUD/JPY has been on the downswing, forming what could be a symmetrical triangle in the process.

But we’ve got quite a few catalysts ahead that could spark a directional move, most notably the Chinese PMI numbers and the Japanese unemployment rate.

They’re not usually big market movers, but if there are surprises, and if they’re big enough, we could see direction action through the session.

For the bulls, watch out for positive Australian/Chinese data vs. weak Japanese data, and in that scenario, a break above the falling ‘highs’ on the chart above may draw in short-term buyers.

With a daily ATR of around 100 pips, going for the previous swing highs between 74.50 – 75.00 are viable targets for a short-term trade, especially if broad risk sentiment remains positive on the session. And with the longer-term trend currently to the upside, a swing position should be considered for a potentially strong return-on-risk.

For the bears, a break below the rising ‘lows’ pattern marked on the chart above on weak Chinese data and/or positive Japanese data could draw in the sellers, especially if we see another round of risk aversion (likely on coronavirus, economic shutdown fears).

The June lows (around 72.50) are actually within the daily ATR range, so this is a viable setup for both short-term and swing trades.