AUD/JPY: Sellers attack 75.00 on downbeat RBA Trimmed Mean CPI

  • AUD/JPY declines over 15 pips after Australia’s Q2 CPI flashed worrisome outcomes.
  • Virus woes strengthen in Australia, Queensland to declare Greater Sydney a COVID-19 hotspot on Saturday.
  • Risk-tone remains sluggish ahead of the Fed’s decision, US policymakers’ delay in providing the fiscal relief disappoint traders.
  • Fitch cut Japan’s outlook, Tokyo expected to cut 2020/21 Real GDP forecast.

AUD/JPY drops from near 75.40 to 75.21 during the early Wednesday's trading. Although sober market mood and recently pessimistic headlines concering Australia and Japan drag the quote downwards, the Pacific major’s details of the second-quarter (Q2) inflation data becomes the key burden on the quote off-late.

Details suggest that the headline Consumer Price Index (CPI) slipped from +0.3% prior to -1.9% on QoQ whereas the RBA Trimmed Mean CPI lagged past-0.1% forecasts and +0.5% previous readings to -0.1%.

Read: Aussie CPI Q2: Ttrimmed mean CPI -0.1 vs Reuters poll +0.1 pct

Earlier during the day, Nikkei came out with the news that the Japanese government is to forecast for the years 2020/21 a real Gross Domestic Production contraction of around 4.5%, revising its pre-coronavirus projection for a 1.4% growth. Following the news, global rating agency Fitch also crossed wires while revising down its credit outlook for Japan to negative. Though, the rating giant refrained from cutting the A+ credit grade of the Asian major.

On the other hand, news rolled out that Queensland is declaring all of Greater Sydney a COVID-19 hotspot effective at 1: 00 AM on Saturday. While providing details of the announcement, Queensland premier Annastacia Palaszczuk says no one from greater Sydney will be allowed into Queensland from the said time.

Other than the respective domestic catalysts and the pandemic pessimism, US policymakers’ inability to roll out details of the much-awaited phase 4 coronavirus bill also weighs on the market sentiment. Furthermore, expectations of the Fed Chair Jerome Powell’s dovish speech and the US-China tussle offer additional burden on the market’s mood.

While portraying the same, Japan’s Nikkei 225 and Australia’s ASX 200 print respective losses of 0.87% and 0.20% whereas the US 10-year Treasury yields also remain sluggish around 0.58% by the press time.

Considering the US Federal Reserve (Fed) policy announcement day, traders may keep calm ahead of the release. However, risk catalysts and comments from the BOJ’s Amamiya, specially after news from Fitch and Nikkei, will be the key to watch for the AUD/JPY pair traders.

Read: Fed Preview: Warming up to controlling the yield curve, nudging lawmakers, keeping markets happy

Technical analysis

In addition to an ascending sloping trend line from June 22, at 75.10 now, a 21-day SMA level around 75.00 also restricts the AUD/JPY pair’s near-term downside. Meanwhile, buyers are less likely to look for entries unless witnessing a clear break of a 10-day SMA level of 75.45, which in turn could attack the 76.00 threshold.

Additional important levels

Today last price 75.25
Today Daily Change 0.03
Today Daily Change % 0.04%
Today daily open 75.22
Daily SMA20 75.02
Daily SMA50 74.06
Daily SMA100 70.81
Daily SMA200 72.49
Previous Daily High 75.58
Previous Daily Low 75.01
Previous Weekly High 76.88
Previous Weekly Low 74.82
Previous Monthly High 76.79
Previous Monthly Low 71.61
Daily Fibonacci 38.2% 75.23
Daily Fibonacci 61.8% 75.36
Daily Pivot Point S1 74.96
Daily Pivot Point S2 74.7
Daily Pivot Point S3 74.39
Daily Pivot Point R1 75.53
Daily Pivot Point R2 75.84
Daily Pivot Point R3 76.1



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