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  • Official manufacturing and non-manufacturing PMI from China lagged behind consensus and prior.
  • Caixin manufacturing PMI and private sector credit numbers in focus for further direction.

AUD/JPY currently trades near 79.60 after shedding nearly 40 pips as China’s official manufacturing and non-manufacturing PMIs lagged behind market consensus and prior.

April month purchasing manager index (PMI) data from the China Federation of Logistics and Purchasing (CFLP) disappointed Aussie bulls. The NBS manufacturing PMI lagged behind 50.5 market consensus and prior to 50.1 whereas non-manufacturing PMI dropped to 54.3 against 54.5 forecasts and 54.8 earlier.

On-going golden week holidays in Japan are negatively affecting the Japanese Yen (JPY) volatility while optimism surrounding global equities restricts near-term upside.

After the official release, Caixin manufacturing PMI will also be up for release in the next few minutes. The private industry survey is likely to come in at 51.0 versus 50.8 prior.

Other than China data, Australia’s private sector credit numbers for March will also grab market attention. The Aussie credit gauge is likely to remain unchanged at 0.3%.

Additionally, on-going trade negotiations between the US and China could keep playing background music for all the AUD pairs, including AUD/JPY. Recently, the US officials signal that they are in final rounds of talk with their Chinese counterparts before closing in the much awaited deal.

Technical Analysis

Sustained break of 78.95/79.00 resistance-confluence comprising 100-day simple moving average (SMA) and 61.8% Fibonacci retracement of its December 2018 to January 2019 drop becomes pre-requisite for to aim for 79.60 and 200-day SMA near 80.00.

Meanwhile, 78.50 and 78.10 can limit immediate downside, a break of which highlights 77.50/45 area including multiple lows marked since January 14.