The Aussie is seeing smaller gains against the yen!
Is AUD/JPY about to see a bearish reversal? Or are AUD bulls just taking a breather?
Before moving on, ICYMI, yesterday’s watchlist looked at NZD/CAD’s upswing for a potential pullback setup to a longer-term downtrend. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Euro Area officially sinks into a recession with a 0.1% GDP decline in Q1 2023 after shrinking by 0.1% in Q4
U.S. initial jobless claims jumped from 233K to 261K in the week ended June 3, marking the third consecutive week of increases and the highest claims since October 2021
S&P 500’s Thursday gains put the index 20% above its October lows, signaling a possible bull market
China’s producer prices fell by 4.6% y/y in May, marking the eighth consecutive monthly decrease and the fastest decline since February 2016
China’s consumer inflation grew by 0.2% y/y in May, higher than April’s 0.1% increase but lower than the 0.3% estimates
Oil prices partially recover after US and Iran deny the reported nuclear deal
Price Action News
Overlay of JPY Pairs 15-min
Asian session traders took cues from their U.S. counterparts and showed more appetite for risk.
In case you missed it, U.S. session traders saw a weak U.S. jobless claims report and priced in less hawkishness from the Fed. The S&P 500 exiting bear market status didn’t hurt either.
The risk-taking weighed on the safe-haven yen and now JPY is about 0.20% to 0.25% lower against all of its major counterparts (including the U.S. dollar!)
Italy’s industrial production at 8:00 am GMT
Canada’s labor market data at 12:30 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
I don’t know if you’ve noticed but the Aussie is NOT making new highs against the yen!
AUD/JPY has been making higher lows all month, but it looks like there are enough bears around the 93.40 area to discourage more buying.
Does this mean that AUD/JPY’s uptrend is at an end?
The 100 and 200 SMAs are saying “It’s possible” as they tighten their gap and signal a possible bearish SMA crossover.
But AUD/JPY is trading in an ascending triangle pattern, which could always break to the upside.
Let’s see if today’s catalyst pushes the pair in either direction.
Continued risk appetite could boost AUD/JPY above its triangle and R1 (93.47) resistance and push the pair to the 94.00 area of interest.
But if traders unload their “risky” bets before the week ends, then AUD/JPY could trade below today’s Pivot Point level (93.22) and break its trend line support.
What do you think? Which way will AUD/JPY go?
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