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Daily Forex News and Watchlist: AUD/JPY

It looks like Asian and early European traders are still taking risks!

Will this translate to AUD/JPY making new intraweek highs in the next trading sessions?

Before moving on, ICYMI, yesterday’s watchlist looked at EUR/NZD’s channel resistance while traders were selling commodity-related currencies. 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:

British Retail Consortium: U.K.’s annual shop price inflation cooled from 7.6% to 6.9% in August, marking its slowest price increase since October 2022

Japan’s unemployment rate rose for the first time in four months, up from 2.5% m/m to 2.7% m/m in July

China’s property giant Country Garden seeks a grace period of 40 calendar days for a maturing yuan bond

PBOC kept up its support for the yuan with a midpoint rate setting at 7.1851 against USD – over 1,000 pips stronger than the market consensus

GfK: Germany’s consumer climate worsened from -24.4 to -25.5 over declining income expectations and declining propensity to buy in August

Price Action News

Overlay of NZD Pairs: 15-min

Overlay of NZD Pairs: 15-min

There were not a lot of fresh catalysts that moved the major currencies during the Asian session, so traders had time to price in a risk-friendly environment from the previous U.S. session.

It may have also helped that Asian equities recouped some of their losses from the previous day and ahead of this week’s top-tier economic releases.

In this case, risk-taking translated to AUD and NZD strength. NZD, in particular, gained the most against CHF, EUR, and CAD and gained the least against its fellow comdoll AUD.

U.S. house price index at 1:00 pm GMT
U.S. CB consumer confidence at 2:00 pm GMT
U.S. JOLTS job openings at 2:00 pm GMT
Australia’s annual CPI at 1:30 am GMT (Aug 30)
Australia’s building approvals at 1:30 am GMT (Aug 30)

AUD/JPY 15-min Forex

AUD/JPY 15-min Forex Chart by TV

It seems like traders are maintaining their cautious optimism while they wait for closely watched data releases like Australia’s CPI report or Uncle Sam’s labor market data.

Cautious risk-taking is probably a reason why AUD/JPY easily found support from the 94.25 area of interest in the 15-minute time frame.

Of course, it doesn’t hurt that 94.25 lines up with the 50% Fibonacci retracement of today’s upswing as well as the mid-channel line on the chart.

How high can AUD/JPY fly in the next trading sessions?

Today’s lower-tier reports from the U.S. could make or break the overall risk-taking vibe in the markets.

Releases that support an extended rate hike pause from the Fed may boost risk-taking and push AUD/JPY to new weekly highs near 94.50.

But if traders focus on the economic risks of a high-interest rate environment, then AUD/JPY may revisit lower inflection points like 94.10 or 94.00.

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