AUD/JPY remains stuck in a 20-pip range after Lowe’s speech, China PMI

• AUD/JPY trades the 20-pip range of 79.80-80.00 for the fourth- straight hour. 
• RBA’s Lowe reiterates easing bias, but rules out negative rates. 
• China’s Caixin Services PMI shows a slowdown in the pace of expansion in the service sector.

AUD/JPY’s range play continues, with the Reserve Bank of Australia (RBA) Governor sticking to the script during this speech at 1:30 GMT and China data indicating a slowdown in the service sector expansion. 

“There would have been an unwelcome upward pressure on the Aussie dollar without QE [bond purchases]extension,” Lowe said, adding that a very significant monetary support will remain in place for some time. The central banker ruled out negative rates. 

The RBA’s dislike for sub-zero rates and dovish stance is generally accepted by now and priced in by markets. As such. Lowe’s comments failed to elicit a strong reaction from the Aussie pairs. 

Similarly, China’s Caixin Services PMI data for January released at 01:45 GMT has been largely ignored by markets. While the actual figure of 52.00 bettered the estimate of 51.1, it marked a significant decline from December’s 56.3 print. An above-50 reading indicates expansion in the activity.

AUD/JPY remains locked in the 89.80 to 90.00 range for the fourth straight hour. With the S&P 500 futures trading higher on signs of easing of coronavirus pandemic and expectations for additional US stimulus, the pair looks set to rise above 90.00. The latest dovish comments from Bank of Japan’s Wakatabe could also weaken the yen and add to bullish pressures around AUD/JPY. 

Technical levels