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  • AUD/JPY fails to extend bounce off 100-day EMA.
  • Mixed Aussie PMI data, Brexit headlines recently weigh on the pair.
  • Statistics from Japan, risk catalysts will be on the traders’ radar.

Not only mixed activity numbers from Australia but recent downbeat headlines concerning the Brexit also weigh on the AUD/JPY pair as it pulls back to 74.45 during the early Asian session on Thursday.

The preliminary readings of October month activity numbers from the Commonwealth Bank of Australia (CBA) and Markit portray mixed momentum. The reason being an upbeat manufacturing outcome confronting weak services PMI, which in turn results in a lesser than prior 52.0 to 50.7 reading of the Composite Purchasing Managers’ Index (PMI).

Elsewhere, risks of a snap election in the United Kingdom (UK) seem to increase off-late with the Finance Minister Sajid Javid supporting the same on the ITV interview while the opposition Labour Party’s finance spokesman showing readiness whenever it comes.

The pair bounced off from 100-day Exponential Moving Average (EMA) on Wednesday after upbeat trade/Brexit headlines favored the market’s risk tone. Also adding to the pair’s strength was the news that the Bank of Japan (BOJ) was considered to have a gloomier view on the economic outlook.

Investors will now keep a close eye over Japan’s Preliminary reading of October month Jibun Bank Manufacturing PMI, expected 48.8 versus 48.9, followed by Leading Economic Index and Coincident Index for August, which are both likely to remain unchanged at 91.7 and 99.3 respectively.

It should also be noted that the recent news concerning the US-China trade deal has been positive and trade/Brexit headlines will keep occupying the driver-seat for now.

Technical Analysis

The pair needs a successful break above the monthly top surrounding 74.85 in order to visit 75.15/20 area including late-June to early-July lows. Alternatively, a downside break of a 100-day EMA level of 74.00 could recall 50-day EMA level of 73.38 to the chart.