We will take a look at a potential trading opportunity in AUDJPY below but let us first cover some market news from elsewhere. After hitting our targets yesterday US equity index futures traded sideways near potential support levels. The Philly Fed Manufacturing Index was confirmed at 15, a level anticipated by the analyst consensus and down two points from 17 in August. Unemployment claims were higher than expected in the US and came in at 860K (825K expected). In the UK the BOE monetary policy committee is reportedly considering more QE by the end of the year with a possibility of negative rates later. Crude oil was bid yesterday as OPEC said they will take action on members that are not cutting output as agreed. OPEC curbed production earlier due to the reduction in demand caused by the virus pandemic. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

AUDJPY, Daily

The Japanese Yen strengthened overnight even though the Bank of Japan sounded dovish. This obviously does not make sense and therefore the move could reverse rather quickly. We are actually seeing that in the AUDJPY. The pair created a bullish exhaustion candle at support (76.12), a level that coincided with 38.2% Fibonacci retracement level and the 50-day SMA. AUDJPY is also trading at the channel low which makes it more likely to reverse the recent down move.  We believe that buyers are likely to engage in this market above 76.10. We look for long signals above this level with our target one (T1) at 77.10 and target two (T2) at 78.10. To take advantage of our analysis and ultra-low trading fees, register for an account and deposit here.

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Recent macroeconomic data releases

  • US Federal Funds Rate, <0.25, (<0.25 expected)
  • Australian Employment Change, 111K (-40K expected)
  • Australian Unemployment Rate, 6.8% (7.7% expected)
  • BOE MPC Official Bank Rate Votes, 0-0-9 (0-0-9 expected)
  • BOE Official Bank Rate, 0.1% (0.1% expected)
  • MPC Asset Purchase Facility Votes, 0-0-9 (0-0-9 expected)
  • Canadian ADP Non-Farm Employment Change, -205K
  • US Philly Fed Manufacturing Index, 15 (15 expected)
  • US Unemployment Claims, 860K (825K expected)

Macroeconomic data releases today

  • UK Retail Sales, 0.8% expected
  • Canadian Core Retails Sales, 0.5% expected
  • US CB Leading Index, 1.3% expected
  • Preliminary UoM Consumer Sentiment, 75 expected

You may access the times and dates in the economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

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Janne Muta
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