Are risk-off flows likely to stay in play for the rest of the day?
Take a look at these support levels that AUD/JPY could aim for.
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Chinese headline CPI stayed flat year-over-year in June vs. projected 0.2% uptick and earlier 0.2% gain
Chinese June PPI posted steeper 5.4% year-over-year decline after earlier 4.6% slump, worse than the projected 5.0% drop and marking its steepest fall in seven years
U.S. Treasury Secretary Yellen met with Chinese officials in “direct and productive” discussions of economic and political issues
Japanese Economy Watchers sentiment index fell from 55.0 to 53.6 in June vs. estimated dip to 54.8
Price Action News
Overlay of AUD Pairs 15-min
After a lot of consolidation and a bit of a rally versus the dollar, AUD pairs started the week on shaky footing when China printed weaker than expected inflation data.
The Aussie sold off across the board, chalking up the steepest losses to the franc, yen and euro, while also falling behind its comdoll buddies.
Yen pairs were also on the move, with USD/JPY resuming its rally close to 143.00 mark despite rising JGB yields before retreating.
Canadian building permits at 12:30 pm GMT
BOE Governor Bailey’s speech at 3:00 pm GMT
U.S. consumer credit data at 7:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/JPY 15-min Forex Chart by TV
This pair looks prime for another leg lower, as it just broke below a short-term rectangle pattern!
Note that the formation spans a little over 50 pips, so the resulting selloff could be of at least the same height.
AUD/JPY is now down to S1 (94.66) and might still be aiming for the next support zones at S2 (94.27) and S3 (93.80) next.
However, a return to risk-on flows or JPY weakness could lift the pair back up to the area of interest near the pivot point (95.12) or higher.
There’s not much in the way of top-tier catalysts in the upcoming New York session, so AUD traders might have to hold out until the next Asian session for the release of Australia’s NAB business confidence index.
Take note that AUD/JPY moves an average of 95 pips per day, so make sure you keep this in mind when setting entries and exits!
