AUD/JPY drops to 74.30 as Aussie Q3 GDP slips beneath forecast on QoQ
|- AUD/JPY respected Australia’s QoQ reading of GDP while taking a U-turn from a multi-day high.
- Trade war concerns remain in the spotlight, US house, Trade Secretary Ross act as the recent catalysts.
- China’s Caixin Services PMI could be watched for intermediate direction amid a broad risk-off.
AUD/JPY declines to 74.30 Wednesday’s Asian session as Australia’s Q3 GDP lagged behind consensus on QoQ.
Australia’s third-quarter (Q3) Gross Domestic Product (GDP) slipped to 0.4% on QoQ versus expectations of no change at 0.5%. Though, the yearly figure matched upbeat expectations of 1.7% growth against 1.4% prior. Elsewhere, Japan’s November month Jibun Bank Services Purchasing Managers’ Index (PMI) rose to 50.3 versus expected outcome of 50.4 and 49.7 prior.
Escalation of trade war concerns remains to be the key driver of the market’s recent risk-off sentiment. The United States (US) and China are now signaling phase-one in 2020 versus the previous expectations of it by the year-end. While the US Trade Secretary Wilbur Ross leads the Trump administration speakers to convey their bargaining tricks, China’s retaliation to the Hong Kong Act portrays the other extreme. The latest on this comes from Reuters claiming that the US House has passed a bill demanding sanctions on senior Chinese officials.
Also contributing to the risk sentiment are increasing odds of the US President Donald Trump’s impeachment. The recent news from Reuters mentions that the US House Intelligence Committee has approved US President Trump's impeachment report.
In a reaction to the market’s risk-off, the US 10-year treasury yields slipped more than 10 basis points to sub-1.72% on Tuesday, taking rounds to 1.725% by the press time.
Having witnessed initial market reaction to the Aussie data and risk catalysts, markets will now look forward to China’s Caixin Services PMI, bearing a consensus of 52.7 against 51.1 prior, for the November month outcome, could entertain the pair traders.
Technical Analysis
Considering the presence of multi-week-old rising wedge bearish formation, sellers look for entry below the 74.00 to take aim at 23.6% Fibonacci retracement of April-August fall, at 72.52. On the contrary, Tuesday’s high near 74.85 and 75.00 seem nearby resistances the bulls should be caring for.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.