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August 4, 2021

Daily U.S. Session Watchlist: AUD/JPY

 So the RBA is sticking to its plan to taper later this year.


Will the optimism be enough to break AUD/JPY’s short-term downtrend?


Before moving on, ICYMI, today’s Asia-London session watchlist looked at AUD/CAD’s 1-hour Fib retracement pullback ahead of the RBA’s policy decision. Be sure to check that out if it’s still a valid play!


And now for the headlines that rocked the markets in the last trading sessions:


Fresh Market Headlines & Economic Data:

Fed’s Waller: ‘Go early and go fast’ on taper

Tokyo shows an inflation pulse for the first time in a year

Australia’s dwelling approvals fall further in June

AU consumer confidences rebounds 1.1% after lockdowns lift

Chinese game shares plunge after media labelling online gaming ‘spiritual opium’

RBA will trim bond buying even as Delta variant slams economy

Asian stocks slip as Delta spread spooks investors

Delta virus fears support safe-haven currencies, A$ up after RBA

Upcoming Potential Catalysts on the Economic Calendar:

Eurozone’s PPI at 9:00 am GMT

Canada’s manufacturing PMI at 1:30 pm GMT

U.S. factory orders at 2:00 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.


What to Watch: AUD/JPY

In case you missed it, the Reserve Bank of Australia (RBA) decided earlier today to stick to its plan of trimming its government bond purchases starting September even though the rise in the Delta variant cases had recently forced key cities to up their lockdown measures.


The decision to keep its taper plans gave AUD a boost and pushed AUD/JPY to the 80.90 levels near the 1-hour chart’s 100 SMA.



But that was a few hours ago. A quick look at the forex calendar tells us that there aren’t a lot of possible game-changers on the docket.

By the time the U.S. session traders get back on their desks, concerns about rising COVID-19 cases, China’s crackdown on several industries, and the Fed tapering some time this year would still be as valid as they were yesterday.


If the RBA’s tapering doesn’t lead to AUD/JPY breaking above its weeks-long trend line resistance, then AUD/JPY could drop back to its weekly lows.


But if the Asian session traders’ preference for the Australian dollar extends to their London and U.S. counterparts, then we could see AUD/JPY trade above its 200 SMA and head for last week’s highs.