AUD/JPY snaps four-day winning streak to attack 76.50 amid risk reset
|- AUD/JPY grinds lower following a U-turn from 76.60.
- Aussie budget announcements, economic outlook couldn’t please the bulls amid US-China tussle.
- Australian NAB Business Confidence slipped below -8 forecast and -12 prior (revised) to -15 in Q2 2020.
- Japanese banks are closed due to the Marine Day.
AUD/JPY eases to 76.45, down 0.07% on a day, as Asian traders approach the mid-Thursday momentum. The pair recently weakened amid escalating tension between the US and China whereas mixed economic forecasts and downbeat data from Australia exert additional burden. Furthermore, S&P’s hint to Aussie credit rating also weighs on the quote amid Japan’s off.
National Australia Bank’s (NAB) Business Confidence gauge for the second quarter (Q2) came in under -8 market consensus and -12 revised prior to -15 QoQ. Around the same line, updates from Aussie Treasurer Josh Frydenberg and Finance Minister Mathias Cormann suggested that the Pacific major will have trouble before bouncing off the coronavirus (COVID-19) woes. While identifying the risk global rating major S&P said, “Risks to Australia’s AAA rating remain tilted toward the downside.”
Elsewhere, the Chinese embassy harshly talked down the US force closure of Houston-based consulate office, in addition to pushing the American diplomats off Wuhan. The world’s two major economies have been on the loggerheads since long over the Hong Kong security bill and any further tension can even defy their much-awaited trade deal.
It should also be noted that the pandemic figures have been flashing worrisome signs in Australia and Tokyo, despite the latest pullback in new cases. Furthermore, risks have also been weighed down by the uncertainty surrounding the US fiscal plan.
Against this backdrop, S&P 500 Futures struggles to extend the four-day winning streak while stocks in Australia print mild gains around 6,092.
Given the lack of major data/events, the pair trader may have to witness a bit more of the lackluster trading. Though, recent headlines suggesting risk-off mood could gradually open doors for the bears’ entry.
Technical analysis
In addition to the mid-January top near 76.25, the 76.00 threshold also holds the gate for the sellers’ dominance. On the contrary, fresh buying is less likely unless the quote rises past-77.00.
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