- Disappointing print of China’s Manufacturing PMI extended AUD/JPY’s previous pullback.
- US-China trade developments can offer fresh directives.
With China’s Caixin Manufacturing PMI following the suit of official numbers, the AUD/JPY pair drops to 75.68 during early Monday.
China’s Caixin Manufacturing PMI slumped to five-month, also in the contraction region, as it flashes 49.4 figure versus 50.0 forecast.
The risk-on currencies earlier benefitted from the market’s initial reaction to the US-China trade deal. However, bulls couldn’t rule for long as sluggish data from Australia grabbed sellers’ attention.
Among them, Australia’s AIG Manufacturing Index and TD Securities Inflation Index for June were the first ones to note. The AIG manufacturing gauge slumped to the lowest in a year to 49.4 versus 52.7 whereas TD securities’ inflation number remained unchanged at 0.0%.
It should also be noted that weekend releases of official manufacturing purchasing managers’ index (PMI) from China also weighed on the Aussie buyers’ sentiment.
Traders may now concentrate on further developments surrounding the US-China trade for fresh directives.
Technical Analysis
Failure to cross 50-day exponential moving average (50-D EMA) seems to drag the quote back to 21-D EMA level of 75.24 whereas June 19 high around 74.78 and the June month low near 73.92 can please bears afterward.
On the upside break of 76.07 level comprising 50-D EMA, the pair can rise to May 06 low of 76.79 ahead of aiming multiple resistances near 77.40/50.
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