AUD/JPY paints the clearest picture of the broad rally in yen crosses. The pair founds support on August 28 and has ripped higher. This week alone, the pair has shot up 370 pips.

A key catalyst has been China. This week’s PMIs were roughly in-line with expectations but they’re turning higher and the summer fears about a Chinese slump have evaporated. The other main driver has been diminished fear about airstrikes on Syria turning into an extended or regional war.

Fundamentally, those factors will be neutralized for the next few days. There is no Chinese data until the weekend and all the ‘good’ news is probably priced into Syria. In any case, no bombs are likely to fall this week.

Technically, the problems are clear. USD/JPY is struggling ahead of of 100 and AUD/USD is nearing a cluster of resistance around 0.9200. Both will limit near-term AUD/JPY gains. Of the two, USD/JPY is most-likely to break and that could add a final leg to AUD/JPY before it runs into resistance ahead of 0.9300.

AUDJPY daily chart Sept 4

Bottom line: watch USD/JPY for clues but be ready to take profits on longs.