AUD/JPY bears testing bull's commitments at support structure

• AUD/JPY is dangerously close to a bearish breakout.
• Bulls will need to get price above counter-trendline and resistance structure to fend off the bears.
• Plenty of fundamentals are stacked in the bull's favour, but critical data awaits. 

AUD/JPY is testing the downside of a key support level the 1-hour chart at the time of writing while fundamentals lean mainly on the bullish side for the pair.

The day ahead holds an array of risk factors, however, which include the Aussie jobs data and Chinese gross Domestic Product.

The headlines pertaining to a COVID-19 vaccine will be underpinning risk appetite but there is still plenty to prove and much room for disappointment along the way. 

Fauci's colleagues at the National Institutes of Health and Moderna Inc developed the first COVID-19 vaccine tested in the US.

In the first round of tests on 45 volunteers, it has been reported to have heightened their mmune systems just the way scientists had hoped.

The shots are poised to begin key final testing around July 27.

While the economic sentiment has improved, the durability of the recovery is in doubt, especially in the US which coronavirus case numbers and increased restrictions weigh. 

Meanwhile, adding to the positive vibes of yet further surprise positive earnings from the US banks were comments from German Chancellor Merkel that Germany is prepared to compromise in order to reach a deal for the European Recovery Fund. 

The headlines come ahead of this Friday's and weekend EU summit where much risk sentiment for the open next week will be depending on the outcome.

"Opposition still remains though, with the Dutch Prime Minister insisting on strong conditions for those accessing EU grants," analysts at ANZ Bank explained. 

Aussie jobs in focus

Australia’s June labour force survey is up for being a main highlight and potential risk for the cross.

. Employment fell about -835k in April and May and there is a wide range of expectations on whether the June survey will capture a partial rebound.

The median forecast is +100k but the range is -60k to +350k, with Westpac on -30k.

Westpac looks for the unemployment rate to rise from 7.1% to 7.3%.

This matches consensus, with the extent of the expected rise in participation difficult to predict, after its collapse to a near-20 year low of 62.9%.

analysts at Westpac explained. 

AUD/JPY hourly chart