Partner Center Find a Broker

We’ve got the latest interest rate decision coming soon from the Reserve Bank of Australia, making this range on AUD/JPY one to watch for the session.

Equity Markets Bond Yields Commodities & Crypto
DAX: 10053.00 +5.53%
FTSE: 5560.58 +2.68%
S&P 500: 2598.94 +4.43%
DJIA: 22011.97 +4.61%
US 10-yr 0.656% +0.067
Bund 10-YR -0.418% +0.018
UK 10-YR: 0.331% +0.021
JPN 10-YR: 0.33% +0.02
Oil: 27.07 -4.48%
Gold: 1692 +2.81%
Bitcoin: 7091.04 +4.43%
Etherium: 155.55 +8.82%

Fresh Market Headlines & Economic Data:

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

  • New Zealand Business confidence at 10:00 pm GMT
  • Australia Ai Group Services Index at 10:30 pm GMT
  • Japan Household spending & Average Cash Earnings at 11:30 pm GMT
  • Australia Trade Balance, Job Ads at 1:30 am GMT (Apr. 7)
  • Reserve Bank of Australia Interest rate decision at 4:30 am GMT (Apr. 7)
  • Japan Leading Economic index at 5:00 am GMT (Apr. 7)

What to Watch: AUD/JPY

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

Busy calendar ahead for both the Aussie and the Japanese yen, but the likely driver for price action will be the latest interest rate decision from the Reserve Bank of Australia. Analysts are expecting changes or specific forward guidance from the RBA, but if there is surprise rhetoric or changes during the event, expect some action for the Aussie in the short term.

Even with low expectations of a big move, volatility may pick up enough for this simple technical setup on AUD/JPY to become a trade opportunity. On the one hour chart above, the pair is on the upswing thanks to today’s shift back to global risk-on sentiment (Wall Street opens higher on coronavirus slowdown hopes) and looks to retest the top of the recent range behavior, around the 67.00 – 67.50 area.

If retested and we do get weaker-than-expected rhetoric from the RBA, more stimulus, then a short play on AUD/JPY should be considered. If resistance and/or reversal short patterns emerge, then shooting for the bottom of the range is not out of the question for a short-term play given the daily ATR of around 170 pips.

If the RBA doesn’t give a worsened outlook and/or more stimulus ahead, then watch out for a break above the 67.50 handle for a possible short-term long position in AUD/JPY. This makes sense given expectations of a big stimulus coming for Japan to likely weaken the yen short-term, and on broad risk sentiment flipping positive today on slowing coronavirus cases/deaths news.

If these conditions hold and we do see an upside break, the major psychological level of 70.00 is an achievable short-term target given the more recent volatility.