AUD/JPY is a focus for end of week risk events

• AUD/JPY bears are seeking a downside continuation in the coming days/weeks. 
• AUD/JPY is tightly correlated to risk sentiment, and the status-quo themes are bullish.
• Focus is on the Jackson Hole and central bank divergence as well as the delta variant spread. 

AUD/JPY is highly correlated to risk apatite, known to be the forex market's risk barometer. 

The cross is sat at the round 80.00 level at the time of writing and flat on the day so far. 

The Jackson Hole starts this Thursday and risk markets have traded positively as anxiety on the future global growth outlook continues to recede. 

The delay variant is fluid and while the US and China could emerge with a cleaner slate than some other less influential nations, an underbelly of risk-off lives on.

This is keeping AUD/JPY under wraps and in the hands of the bears longer term despite a flurry of positive daily candles this week.

Nevertheless, the MSCI world equity index which tracks shares in 50 countries, rose another 0.16% t print a higher cycle high.

The pan-European STOXX 600 index added 0.01%. Yesterday, MSCI's broadest index of Asia-Pacific shares outside Japan, MIAPJ0000PUS, rallied 2.41%.

As for Wall Street, the benchmark S&P 500 and the Nasdaq closed at all-time record highs/ It was the S&P 500's 51st record-high close this year.

This all has left the US Treasury yields rising to the highest in almost two weeks ahead of Powell's speech.

The 10-year yield has broken above its 200-day moving average. 

Meanwhile, locally, ''having achieved its 6 million vaccination target a week early, the New South Wales government will announce some loosening of restrictions for those fully vaccinated, either today or tomorrow,'' analysts at Westpac reported at the start of the Asian day. 

However, Australia's 2nd largest population state, Victoria, has reported a sudden spike in new cases, almost doubling the prior day's count, 80 vs 45. 

The lockdowns in the state are strict with curfews in place in Melbourne. 

This is a negative for the Aussie considering how far the nation is with its vaccine roll-out. 

Meanwhile, we will have Australia’s CAPEX survey today that is expected to point to a 0.8% gain in total investment in Q2.

''The focus ahead of GDP however will be the equipment investment sub-component, which we see gaining circa 3%. Estimate 3 for business investment plans in FY2021/22 was sampled at a trying time for Australian businesses.

As a result, we anticipate a weaker than usual upgrade from Estimate 2. Rather than the typical 12%, it might be closer to 7.5%,'' analysts at Westpac explained. 

''The ABS will also release the latest fortnightly read for payrolls and wages, as of 31 July, which captures wide-ranging lockdowns.''

With those local data aside, the markets will be looking to the US calendar for direction as well today.

The second quarter Gross Domestic Product is expected by the analysts at Westpac ''to only be revised at the margin (if at all) in its second estimate.''

''Initial claims should also edge lower, though delta is a clear risk to that view. Finally, the August Kansas City Fed index will provide yet another regional view of manufacturing in the US,'' the analysts said. 

As for the Jackson Hole, markets are waiting mostly to hear from the Fed's chairman, Jerome Powell.

Powell will deliver a keynote speech this Friday. 

AUD/JPY will likely track the performance of risk assets such as US equities that may struggle should Powell use the event to announce an official timing of a taper. 

However, the status quo would likely lead to a continued risk-on theme, especially if Powell talks up a positive outlook and shows less concern over the delta variant spreading considering recent declines in cases. 

AUD/JPY price analysis

the price has moved on a wall of resistance and plenty of roadblocks ahead.

The path of least resistance, from a structural sense, is to the downside with the broader bear trend.