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  • AUD/JPY concentrated more on the dovish comments from FSR than better than previous data.
  • Early-day headlines, speeches stretched pair’s bounce off the monthly bottom.
  • Risk-tone stays sluggish ahead of the key US data, Fed Chair Powell’s speech.

With the RBA’s FSR highlighting growth risk, AUD/JPY fails to cheer better than previous data readings while taking rounds to 72.10 during early Friday.

August month seasonally adjusted Retail Sales from Australia came in less than 0.5% expectations to 0.4% while beating -0.1% prior. Further, HIA New Home Sales also slipped below 33.7% forecast to 7.3% but stayed far better than -7.2% previous readouts.

On the other hand, the Reserve Bank of Australia’s (RBA) bi-annual Financial Stability Review (FSR) highlights housing market risk, uncertainty about global, domestic macro outlook  while also saying that global uncertainties have increased since the last review in April with greater chance of weak growth.

Although mixed headlines concerning the US President Donald Trump’s impeachment and the UK PM’s Brexit proposal curbed the AUD/JPY pair’s moves during early Asia, recent comments from the US Federal Reserve Vice Chairman Richard Clarida and Japan’s Finance Minister Taro Aso escalate pair’s recovery.

With the Australian Dollar (AUD) benefiting most from the US Dollar’s (USD) weakness, the quote bounced off one-month low on Thursday despite downbeat market sentiment surrounded by the slowdown fears and trade pessimism.

Investors will now be more focused on the US employment statistics, led by the Nonfarm Payrolls (NFP), considering downbeat signals from the forward-looking indicators. Additionally, comments from the Federal Reserve Chairman Jerome Powell will also entertain momentum traders.

Technical Analysis

The 72.50/55 area comprising 10-day exponential moving average (EMA) and mid-August top can challenge pair’s recent recovery, a break of which could propel prices to the weekly top nearing 73.40. Alternatively, pair’s downside break of recent lows close to 71.75/70 can recall 71.00 and 70.70 rest-points to the chart whereas 70.00 will be on bear’s radar afterward.