AUD/JPY is reversing Monday’s gains, Australia NAB business confidence deteriorates

• AUD/JPY jumped 80 pips to 81.53 on Monday. So far, however, the follow-through has been weak.
• The JPY cross is currently trading at 81.29 and could suffer a deeper drop to 81.00 if equities trade risk averse.
• National Bank of Australia (NAB) monthly surveys released a few minutes ago showed business conditions worsened in November.

The AUD/JPY pair is currently trading at the session low of 81.25 – down 28 pips from Monday’s high of 81.53.

The pullback indicates that the corrective bounce in the JPY cross from the 5.5-week low of 80.72 seen yesterday has likely run out of steam. Moreover, the pair could continue to reverse the gains seen yesterday as the Brexit uncertainty will likely keep risk assets on the defensive.

At press time, the S&P 500 futures are indicating the index will report 0.42 percent drop at the opening bell. Meanwhile, Asian stocks are trading in the red – Japan’s Nikkei is currently down 0.58 percent and South Korea’s Kospi is reporting a 0.26 percent drop. Stocks in Australia are trading flat-to-negative.

As a result, the anti-risk JPY could find bids. Meanwhile, the National Bank of Australia (NAB) data released soon before press time showed that both business conditions and business confidence continued their downward trend in November. The markets, therefore, have little reason to bid for the Aussie dollar this Tuesday morning.

AUD/JPY Technical Levels