- AUD/JPY rises to one-week high before stepping back even as Australia’s Q4 CPI jumps above market forecasts.
- Aussie Westpac Leading Index eased below 0.7% prior in December, NAB Business Confidence dropped as well.
- Market sentiment seesaws on mixed data, vaccine hopes and IMF’s upward revision to global economic growth.
- Pre-Fed sentiment can probe the traders but risk catalysts may offer intermediate moves.
AUD/JPY drops to 80.35, following the recent jump to refresh weekly top with 80.44 level, during Wednesday’s Asian session. The pair initially responded to Australia’s better-than-forecast Consumer Price Index (CPI) data for the fourth quarter (Q4) but soft Business Confidence from the National Australia Bank (NAB), following Westpac Leading Index, probed the upside momentum.
Australia’s Q4 CPI rose past-0.7% forecast to 0.9% QoQ while the YoY figures jumped above 0.7% expected to 0.9%. However, the RBA Trimmed Mean CPI marched market consensus of 0.4% QoQ and 1.2% YoY.
Read: Aussie Q4 CPI beats estimates, AUD/USD bid to fresh impulse highs
It should be noted that NAB’s Business Confidence for December dropped below prior 13 to 4 whereas Business Conditions improved to 14 versus 7 prior. Earlier in the day, Westpac Leading Index for December also dropped from 0.7% MoM to 0.12%.
Not only have the mixed data from Australia but uncertainty over the US fiscal stimulus and the US-China tussle also probed the previous day’s risk-on mood. US President Joe Biden’s race to complete his election promises on vaccinations and clean energy seems to have recently pleased the market optimists. Though, chatters over Janet Yellen’s dislike for China and joining hands with the Fed to direct the economy as a US Treasury Secretary seem to have weighed on sentiment.
On Tuesday, the International Monetary Fund’s (IMF) upward revision to the global economic growth forecasts for 2021 and welcome news from the key vaccine producers like AstraZeneca, Moderna and Pfizer seemed to have favored the risks.
Against this backdrop, S&P 500 Futures struggle to keep the latest bids around 3,850 while stocks in Asia-Pacific trade mixed with Australia’s ASX 200 down 0.70% by press time.
Moving on, the AUD/JPY traders will keep their eyes on the risk catalysts for intermediate direction while waiting for the US Federal Reserve’s first announcement of 2021.
Read: Fed Preview: Fearing market froth or boosting Biden's stimulus? Three scenarios
Technical analysis
A clear break of the two-week-old falling trend line directs AUD/JPY buyers toward the 81.00 round-figure. During the rise, the monthly peak close to 80.90 can offer breathing space to the bulls.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.