AUD/JPY: Recovery stalls after China inflation data

AUD/JPY trades at 76.46 versus 76.11 in early Asia.
China's factory-gate deflation eased in August but fails to draw bids for the AUD.
Risk-off looks to be capping the upside in the AUD/JPY pair.

Omkar Godbole FXStreet Contributor

AUD/JPY is struggling to draw bids despite signs of easing in factory-gate deflation in China.

The data released at 01:30 GMT showed China's Producer Price Index or factory-gate inflation fell 2% year-on-year in August, as expected, following July's 2.4% decline.

The Consumer Price Index rose 0.4% month-on-month in August as expected versus July's 0.6% rise. In annualized terms, consumer inflation rose 2.4%.

Fresh evidence of a slowdown in decline in factory-gate prices is good news for the Aussie dollar and other commodity-linked currencies. So far, however, AUD/JPY has had a tough time extending the pre-data recovery from 76.11 to 76.47.

The risk-off action in the global equities could be capping the upside in the AUD/JPY pair. The US stocks fell by over 2% on Tuesday, and the futures tied to the major European equity indices are currently reporting moderate losses.

Further, negative news on the coronavirus vaccine front and Sino-US tensions could be playing spoilsport. As per the latest reports, AstraZeneca's COVID-19 vaccine trial has been paused due to an adverse reaction in a person and the US is considering banning some or all products made with cotton from China’s Xinjiang province.

Looking ahead, the buying interest around the AUD would strengthen if the risk sentiment strengthens – more so, as the data released early Wednesday showed Australia's consumer confidence surged in August. The Westpac-Melbourne Institute index of consumer sentiment jumped 18% in September from August's 9.5% drop.

Technical levels

AUD/JPY

Overview
Today last price	76.46
Today Daily Change	-0.06
Today Daily Change %	-0.08
Today daily open	76.49

Trends
Daily SMA20	76.85
Daily SMA50	75.9
Daily SMA100	73.8
Daily SMA200	72.8

Levels
Previous Daily High	77.64
Previous Daily Low	76.46
Previous Weekly High	78.46
Previous Weekly Low	76.77
Previous Monthly High	78.46
Previous Monthly Low	75.1
Daily Fibonacci 38.2%	76.91
Daily Fibonacci 61.8%	77.19
Daily Pivot Point S1	76.08
Daily Pivot Point S2	75.68
Daily Pivot Point S3	74.9
Daily Pivot Point R1	77.27
Daily Pivot Point R2	78.05
Daily Pivot Point R3	78.46

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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