AUD/JPY treads water around multi-month low, Aussie/China data in the spotlight

• Markets’ rush for risk-safety, amid trade protectionism, keeps dragging the AUD/JPY pair downwards.
• Easy money policy by global central banks and geopolitics are additional catalysts.
• Aussie Industry activity/employment data could entertain traders ahead of China Caixin Services PMI.

AUD/JPY fails to make any progress around the January lows while flashing 72.39 as a quote during early Monday morning in Asia.

The pair has been on a downward trajectory as global central bankers’ rush towards monetary easing joined the US President Donald Trump’s trade tariffs and pushed investors to search for risk-safety. Further, geopolitical concerns surrounding Iran could also be considered as an additional force driving towards the safe-haven demand of the Japanese Yen (JPY).

Although Bank Holiday is likely to limit Aussie moves, activity indices from the AiG and the Commonwealth Bank, followed by TD Securities Inflation and ANZ Job Advertisements, could entertain traders ahead of China’s Caixin Services Purchasing Managers’ Index (PMI) data.

While industry data relating to Services and Composite activities have been upbeat off-late, investors will seek further improvements to the numbers in order to safely turned down bets of another interest rate cut by the Reserve Bank of Australia (RBA) during this week’s monetary policy meeting.

It should also be noted that July month Services PMI from Australia’s largest customer, i.e. China, will be the key to offer near-term trade opportunities. The activity gauge is likely rising to 52.9 from 52.0 prior.

On the other hand, headlines concerning trade/politics will keep global investors on the edge, which in turn favor market’s sustained support for safe-havens like the JPY and Gold.

Technical Analysis

Bears are on the lookout for sustained trading below June 2016 low of 72.40 to target January month low of 70.71 whereas buyers aiming 74.35 can enter only if the pair manages to successfully cross 73.20 nearby resistance.