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AUD/JPY: Downbeat Aussie data question buyers, eyes on the economic calendar

  • AUD/JPY struggles to hold on to the gap-up opening.
  • The latest data from Australia dim the optimism offered through China’s official PMIs.
  • Few more of the second-tier Aussie economics are in line ahead of China’s Caixin Manufacturing PMI.

AUD/JPY seesaws around 74.15 during initial Asian trading hours on Monday. The quote charted a gap-up opening, mainly because of China’s upbeat numbers, but fails to extend the run-up after the recently downbeat statistics from Australia.

Australia’s AiG Performance of Mfg Index for November came in below 51.6 while Commonwealth Bank Manufacturing PMI, also for November, matches 49.9 forecast and prior.

China’s Manufacturing and Non-Manufacturing Purchasing Manager Index (PMI) for November offered a good start to the week, especially to commodity-linked currencies. The headline Manufacturing PMI jumped back to expansionary region, beyond 50.00 mark, to 50.2 while Non-Manufacturing PMI crossed the 52.8 prior with 54.4 level. It’s worth mentioning that the Manufacturing PMI rose to the highest since April.

Moving on, a slew of second-tier Aussie data ranging from TD Securities Inflation to Building Permits are up for publishing ahead of China’s Caixin Manufacturing PMI for November. Forecasts suggest further softening of Australia data while China’s private gauge of manufacturing activity might not follow the official reading’s footsteps and offer additional weakness if matching 51.4 forecasts versus 51.7 prior. On the other hand, Japan’s Jibun bank Manufacturing PMI for November, expected to remain unchanged at 48.6, will also be watched.

Further, recent tension between the United States (US) and China has failed to provide any clear direction to markets as China is yet to announce actual retaliation while keeping phase-one talks on. The reason might be nearness to the deadline, December 15, to the previously announced tariff expansion from the US. With this, markets risk tone stays mostly sluggish.

Although news concerning the US-China tussle and today’s data-packed economic calendar could keep traders on the edge, major attention will be on Tuesday’s Reserve Bank of Australia (RBA) meeting. Additionally, month-start economics from the US can entertain markets during the Federal Reserve’s blackout period.

Technical Analysis

21-day Simple Moving Average (SMA) around 74.30 acts as an immediate upside barrier while an ascending trend line since November 21, at 74.00, could keep near-term moves limited.

 

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