- Australia’s NAB Business Conditions improved but traders concentrate more on sluggish Business Confidence.
- The US-China trade tension adds weakness to the quote.
AUD/JPY traders focus more on downbeat print of Australia’s Business Confidence over more positive Business Conditions as the quote declines to 75.80 after the data releases on early Tuesday.
The National Australia Bank’s (NAB) Business Confidence and Business Conditions data for June showed mixed signals even after matching the market consensus. The former, i.e. Business Confidence, lagged behind 7 prior to 2 whereas Business Conditions grew to 3 from 1.
Adding to the pair’s weakness could be recent pessimism surrounding the US-China trade deal as media releases from both sides cut the odds for a breakthrough during this week’s trade talks between the world’s two largest economies.
Risk tone remains modestly flat despite disturbing signs from the US-China trade front as optimists cheer latest improvement in market sentiment, mainly backed by upbeat employment data from the US. The macro gauge of risk tone, the US 10-year treasury yield clings to 2.04% by the press time.
Looking forward, a preliminary reading of Japan’s June month Machine Tool Orders can offer immediate direction to the pair while lack of data afterward can keep highlighting trade news for fresh impulse. The Machine Tool Orders growth slumped -27.3% during its previous release.
Technical Analysis
Unless successfully rising beyond early-month high around 75.93, chances of the quote’s further rise to 76.30 are less likely, which in turn favor bears targeting 200-bar moving average on the 4-hour chart (4H 200MA) around 75.30.
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