Kicking the last full week of trading with AUD/JPY, currently in an uptrend with the potential to make additional moves on upcoming events from China and Australia.
| Equity Markets | Bond Yields | Commodities & Crypto |
|
DAX: 13265.90 +1.16% FTSE: 6558.63 +0.18% S&P 500: 3691.02 +0.75% NASDAQ: 12528.39 +1.22% |
US 10-YR: 0.908% +0.017 Bund 10-YR: -0.623% +0.015 UK 10-YR: 0.222% +0.048 JPN 10-YR: +0.02% +0.011 |
Oil: 46.61 +0.09% Gold: 1,829.70 -0.75% Bitcoin: 19,213.50 +0.68% Ethereum: 584.35 -0.33% |
Fresh Market Headlines & Economic Data:
Dow jumps 200 points to start the week on vaccine, stimulus hopes
Lawmakers Set to Unveil Relief Plan at 4 p.m.: Congress Update
German Wholesale prices in November 2020: -1.7% on November 2019
Panetta says ECB is ready to expand pandemic buying if needed
Industrial production up by 2.1% in euro area and 1.9% in EU
Britain and the EU agreed on Sunday to keep negotiating over a Brexit trade deal
Barnier Tells EU Envoys Deal Could Come This Week: Brexit Update
No deal’ Brexit could hit UK credit rating, says S&P Global
Japan Tankan Manufacturing Index: -10 Dec. 2020 vs.-27 Sept. 2020
Japan revised industrial production for Oct. 2020: +4.0% m/m; -3.0%
Japan Indices of Tertiary Industry Activity: +1.0% m/m in Oct. 2020; -1.9% q/q
Upcoming Potential Catalysts on the Economic Calendar
RBA Meeting Minutes at 12:30 am GMT (Dec. 15)
RBA Kearns speech at 12:40 am GMT (Dec. 15)
China Industrial Production, Retail Sales, Unemployment rate at 2:00 am GMT (Dec. 15)
What to Watch: AUD/JPY
On the one hour chart above of AUD/JPY, we can see that the bulls have been in steady control of the currency pair, especially after a strong push higher from consolidation around 77.50 to nearly retest the 79.00 handle last Friday.
With the pair currently in consolidation mode once again, that sets up the potential for a breakout play as we could see action from the upcoming RBA meeting minutes and/or Chinese economic updates.
These events aren’t often market-moving, but with the world speculation on recovery as vaccines are rolled out across the world, any positive news could bring in traders to continue the current trend higher. Look out for an upside break in that scenario, with a potential move to the next potential resistance area around the 79.00 major psychological handle (within one daily ATR from current market prices)
For those who are a little more conservative and hope to hop in at a better price, if we see a pullback then the pattern of rising ‘lows’ and a broken resistance area, should be watched for a potential retest-support pattern before considering a swing long position.
For those who are bearish, there is an argument for a potential pullback ahead, especially as the pair retests a major swing high that leads to a big reversal back in August around the 78.50 handle.
The case for this reversal grows if we see negative global risk sentiment headlines like a failure for the U.S. to get a new stimulus package passed, and/or Brexit negotiation developments leading to a no-deal Brexit outcome.
