AUD/JPY remains above 74.00 amid upbeat Australia Retail Sales, risk-on mood


  • AUD/JPY eases from intraday top after Aussie data, bounces off three-week low.
  • Australian Retail Sales shrank 1.5% versus -4.0% prior in September.
  • Market sentiment stays positive amid stimulus hopes despite McConnell’s refrain from entertaining the push for stimulus before the election.
  • Speech from BOJ’s Sakurai, risk catalysts will be the key.

Despite better than previous Aussie Retail Sales, AUD/JPY drops to 74.44 during early Wednesday. The reason could be fresh challenges to the hopes of the US coronavirus (COVID-19) stimulus before the presidential elections. However, the market mood remains mildly positive after US House Speaker Nancy Pelosi struck an upbeat statement following the latest round of aid package talks.

The preliminary prints of the Australian Retail Sales for September recovered from -4.0% prior to -1.5%. The reading contrasts the Westpac Leading Index, published during early Asia, which eased from 0.48% to 0.22% MoM in September.

Read: Australia Retail Sales (Sep. Preliminary): Falls 1.5% MoM, AUD steady

CNBC’s Carl Quintanilla defies stimulus hopes with his latest tweet that relies on the Senate Majority Leader Mitch McConnell’s comments concerning US President Donald Trump’s push for a quick relief package. The tweet said, “Mr. McConnell’s remarks, confirmed by four Republicans familiar with them, threw cold water on Mr. Trump’s increasingly urgent push to enact a new round of pandemic aid before Election Day.”

Even so, S&P 500 Futures and most stocks in Asia-Pacific remain mildly bid whereas the US 10-year Treasury yields also pierce the 0.80% threshold by press time.

The reason for the market’s optimism could be spotted from US House Speaker Nancy Pelosi’s comments that mark progress in the aid package negotiations ahead of Treasury Secretary Steve Mnuchin’s return from the Middle East. The talks are up for a restart on Wednesday.

Given the lack of major data/events, except a speech by the BOJ policymaker Makoto Sakurai, AUD/JPY traders will keep eyes on the stimulus talks for near-term directions. It should also be noted that any further worsening of the virus conditions in Europe and/or tension with China will also be important to watch.

Technical analysis

The bearish MACD and sustained trading below 61.8% Fibonacci retracement of June-August upside keep the AUD/JPY sellers hopeful. Hence, a clear downside past-74.25 will set the tone for the pair’s downside towards the late-June lows surrounding 73.35/30. Though, the September month’s low of 73.97 can offer an intermediate halt during the fall. Alternatively, a daily closing beyond the 61.8% Fibonacci retracement level of 74.80 will aim for the 75.00 round-figure.

Additional important levels

Overview
Today last price 74.43
Today Daily Change 0.08
Today Daily Change % 0.11%
Today daily open 74.35
 
Trends
Daily SMA20 75.2
Daily SMA50 76.14
Daily SMA100 75.51
Daily SMA200 72.86
 
Levels
Previous Daily High 74.61
Previous Daily Low 74.2
Previous Weekly High 76.52
Previous Weekly Low 74.26
Previous Monthly High 78.36
Previous Monthly Low 73.97
Daily Fibonacci 38.2% 74.36
Daily Fibonacci 61.8% 74.46
Daily Pivot Point S1 74.16
Daily Pivot Point S2 73.98
Daily Pivot Point S3 73.75
Daily Pivot Point R1 74.57
Daily Pivot Point R2 74.8
Daily Pivot Point R3 74.98

 

 

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