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  • AUD/JPY recovers as China’s Caixin Manufacturing PMI beats expectations.
  • Lack of fresh clues, on-going rush towards the USD can push traders to political headlines for fresh impulse.

Having witnessed Caixin Manufacturing PMI data from China, the AUD/JPY pair surges to 74.80 during early Thursday.

China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) follows the foot-prints of official reading as it grows past-49.6 forecast to 49.9 but still remains in the contraction region.

With China being Australia’s largest customer, the Australian Dollar (AUD) initially cheered the better than forecast reading.

Latest comments from the Bank of Japan (BOJ) deputy Governor Amamiya and Japan’s July month Nikkei Manufacturing PMI provided additional weakness to the Japanese Yen (JPY) that was earlier bearing the burden of markets rush towards the US Dollar (USD) after the previous day’s Fed action.

The global risk barometer, 10-year US treasury yield, cheers the Fed’s upbeat action as it gains nearly 2 basis points to 2.04% by the press time.

Given the China’s another manufacturing gauge registering contraction in activity, coupled with the end of US-China trade talks without any major breakthrough, investors will now keep an eye over political headlines and market sentiment surrounding the US for fresh impulse.

Technical Analysis

A seven-day long falling channel keeps restricting the quote’s upside attempts around 74.88, if failed then 50% Fibonacci retracement level of June month upside at 75.10 can stop buyers targeting 200-bar moving average on the 4-hour chart (4H 200MA) around 75.34. Alternatively, the channel-support figure of 74.33 will push sellers to aim for June month low close to 73.90.