Markets are currently seeking a safe heaven following the news of the huge Chinese property architect Evergrande filing for bankruptcy in the US. The US Treasury bonds took a downward hit with investors seeking the safety of the US bonds, thus leading to the weakening of the USD.  

The Yen will also benefit from the market uncertainty, as investors will fall back on it for a safe heaven.  

Traders are eager to see the outlook on the Jackson Hole Economic Symposium, which is the next big forum for central bankers. Traders are focused on the indications of terminal rates and the parents' mindset of the central bank. This is the only major event traders are hooked on, as Japanese economic reports are scarce.  

The US Dollar keeps strengthening against the Australian Dollar. AUD has been on a steady decline since the beginning of August. The US Dollar keeps getting stronger amid market jitters concerning the China outlook.   

Many traders are confused and wondering why the US Dollar keeps plunging higher. The answer isn't farfetched, with China facing dilemmas regarding its slowed growth. Especially with its numerous large real estate companies filing for bankruptcy.  

The loosening of monetary policy might increase domestic growth, however, it can reduce the value of the Yuan.  

To prevent the devaluation of the Yuan, official bodies will trade Treasury bonds, and China holds over 800 billion USD worth of Treasury bonds.  

The most recent US Treasury report shows that China has been one of the top investors since 2023, however, they had a drawback in March. The Yuan had an all-time boost in March 2023.  

Last week, the 1-year interest rate was reduced from 2.65% to 2.50% by the People's Bank of China (PBOC).  

On Monday, the Australian dollar traded at extreme levels, as the People's Bank of China decided to slightly cut interest rates. This event resulted in a weaker AUD against the US dollar.  

Price action across the Forex markets today is moderate with traders holding back on making serious market moves. This is due to the upcoming risk events, which are the Jackson Hole Economic Symposium,  and the BRICS summer. However, Jackson Hole is the main event that can change that can swerve the market in the opposite direction. Jerome Powell the Fed Chair can decide to change the present monetary policy, which can give support to the declining Aussie dollar.  

On Monday AUD/USD traded higher than the 0.6400 price mark, while the US dollar declined, regardless of a continual bleak mood. This week's opening had the pair gaping higher but quickly reduced to 0.6364. This is because the poor price action of Asian equities restricted the momentum of the AUD market. At noon EST, the pair recovered, despite trading in a bleak mood.  

AUD/JPY Technical Analysis

The Australian economic calendar has no major risk event coming up until Wednesday. The country's preliminary evaluation of the August S&P Global PMIs will be published on Wednesday.