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With volatility moving and likely to stay that way for now, we’re checking out the ranging action on AUD/USD for potential short-term pips.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/GBP ahead of EU and UK economic updates, 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: 12255.07 +0.19%
FTSE: 6156.22 -1.12%
S&P 500: 3065.32 +0.40%
DJIA: 25574.63 -0.08%
US 10-yr 0.627%  -0.009
Bund 10-YR -0.476% -0.004
UK 10-YR: 0.152% -0.011
JPN 10-YR: 0.035% +0.023
Oil: 39.29 -1.03%
Gold: 1787.40 +0.34%
Bitcoin:9148.54 -0.30%
Ethereum: 225.41 -0.98%

Fresh Market Headlines & Economic Data:

U.S. consumer confidence for June jumps more than expected

The Chicago Purchasing Managers’ Index bounced to 36.6 in June vs. 32.3 in May, but well below 45.0 forecast

Canada GDP plunges a record -11.6% in April

The UK economy shrank more than it has done in over 40 years at the start of 2020

UK Business investment fell by 0.3%, in volume terms, between Q4 2019 and Q1 2020.

The UK current account deficit widened to £21.1B in Q1 2020, or 3.8% of gross domestic product (GDP)

In June 2020, French consumer prices increased by 0.1% y/y

French consumer spending rebounded 37% in May after lockdown eased

Swiss KOF Economic Barometer rises to 59.4 in June vs. 49.62 in May

Swiss turnover adjusted for sales days and holidays rose in the retail sector by 5.6% in nominal terms in May 2020 y/y

Global labour market ‘uncertain’, no return to pre-pandemic levels in 2020: ILO

Oil prices drop on prospect of returning Libyan supplies

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

Fed Kashkari & Bostic speeches at 6:00 pm GMT
API Crude Oil stock change at 8:30 pm GMT
Australia Ai Group Manufacturing Index at 10:30 pm GMT
New Zealand Building Consents at 10:45 pm GMT
Australia CommBank Manufacturing PMI at 11:00 pm GMT
Japan Tankan Manufacturing Index at 11:50 pm GMT
Japan Jibun Bank Manufacturing PMI at 12:30 am GMT (July 1)
Australia Building Approvals at 1:30 am GMT (July 1)
China Caixin Manufacturing PMI at 1:45 am GMT (July 1)
Japan Consumer Confidence at 5:00 am GMT (July 1)

What to Watch: AUD/USD

AUD/USD 1-Hour Forex Chart
AUD/USD 1-Hour Forex Chart

On the hourly chart above, we can see moving quietly sideways for the past few sessions as we’ve lacked any major catalysts over the past week. And with no major catalysts expected for the rest of the U.S. session, it’s unlikely we’ll see any major moves unless we do get a news surprise.

But in the upcoming Asia session, there’s a chance for a pick up in action with the latest Australian and Chinese PMI data, presenting different potential short-term strategies for ranging patterns above.

One setup could be if we see a big surprise in the PMI numbers from both AU and China, then a straddle play around the tight consolidation pattern (ranging between 0.6840 – 0.6895) could catch quick pips on either side of the market. And with a daily ATR of around 70 – 80 pips at the moment, the top of the larger range (around 0.6700) is an achievable upside target, while June swing lows around 0.6780 is an end-of-week target to shoot for.

Another idea to consider is watching the the top of the larger range (between 0.6840 – 0.6970) for resistance and a swing position. With the probability of the U.S. posting up improved employment numbers later this week, any resistance and reversal patterns around 0.6970 could be a potential bullish USD setup going into Friday’s U.S. employment update.

Using the daily ATR as a stop guide and targeting the bottom of the range creates a roughly 1.70:1 potential short-term return-on-risk, which is an acceptable R:R on very short-term trades.