We’ve got big time Australian data coming next week, so I thought I’d work out a few scenarios to play the event.
Resistance Holding on AUD/JPY?
Looking ahead on the forex calendar, I see we’ve got a potential big time catalyst with the latest update on Australia’s employment situation. This should be a market mover for the Aussie, and based on the latest PMI data from Australia odds are that this could be a slightly better read than last month’s update of just under 5,000 net jobs added. Based on the services PMI survey, we saw a pick up in the services sector, which makes up 72% of total employment, but the manufacturing and construction sectors showed declines in March.
So, what I’ll be watching out for next week is if that scenario plays out where we see a better-than-expected read and improvement over last month. If so, this pair goes on my watchlist for an upside breakout-and-retest setup to go long for a short-term trade. I prefer this scenario and trade setup as the U.S.-China trade deal seems to be progressing in the right direction and broad risk sentiment is on the upswing lately thanks to central banks keeping their easy money policies.
In the case where we get a weaker-than-expected jobs update, I’ll look to play the short side for a short-term position. This pair has been in a solid range for the past few months, and a downside move from the major resistance around 79.50 could yield a solid potential short-term R:R of over 1:1 if using the daily ATR for my stop and the bottom of the range as my target.
Be on the lookout for the idea next week, and until then let me know what you think of this watchlist entry by commenting below. Thanks for checking out my blog!
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