AUD/JPY: Challenges to risk battle Australia jobs report below 76.00

AUD/JPY drops to 75.69 after recently failing to extend the bounce off 75.71 beyond 75.85 during Thursday’s Asian session. The pair’s earlier recovery took clues from welcome employment data from Australia. However, the bulls are probed amid the challenges to the risks.

Not only the big beat of Employment Change but Unemployment Rate and other labor market data also defied the pessimistic market consensus during October.

Read: Aussie Unemployment rate increased to 7.0% vs 6.9% prior, AUD firms

Talking about the risks, the US covid death toll crossed 250,000 on Wednesday while Japan marks over 2,000 cases, the highest since the early pandemic era. It should also be noted that South Australia announces the toughest activity restriction measures after the latest surge in the virus numbers.

China’s turning down of Hong Kong’s elected members gained global ire as the UK, Australia and the US jointly criticize the move while urging the Asian major to respect international commitments. In doing so, the global leaders take risk of a fresh trade/political war even as the economy isn’t out of the coronavirus (COVID-19).

Also weighing on the risks could be the latest headlines from the UK Times conveying the European leaders’ frustration over the lack of progress in the Brexit talks. The piece also cites the push to prepare for a no-deal Brexit.

Against this backdrop, S&P 500 Futures drop 0.20% whereas Australia’s ASX 200 and Japan’s Nikkei 225 also print a less than 0.50% loss for the day by press time.

With the risk catalysts in the driver’s seat, coupled with a lack of major data/events up for publishing in Asia, headlines concerning the virus, China and Brexit can keep entertaining the AUD/JPY traders.

Technical analysis

A clear break below the 100-day SMA level of 75.70 becomes necessary for the bears to keep the reins.