AUD/JPY wavers around 20-month high above 79.00, China PMI in focus
- AUD/JPY takes rounds to April 2019 high during three-day run-up.
- Upbeat equities, vaccine hopes join weak US dollar to favor the bulls.
- Recent covid update challenges further upside ahead of data from the key customer.
Having rose to the fresh high since April 2019 the previous day, AUD/JPY seesaws in a choppy range between 79.39 and 79.22 during Thursday’s Asian trading. While cautious optimism backed the pair buyers to refresh the multi-month high the previous day, recent challenges to the risk and wait for the official activity numbers from China challenge the quote’s further upside.
Updates suggesting a 12-week delay in the second-shot of the coronavirus (COVID-19) vaccine in the UK, coupled with the second virus strain found in California, recently probed market sentiment. Also challenging the mood could be comments from US Senate Majority Republican Leader Mitch McConnell who suggested no swift passage to the $2,000 paycheck.
On the positive side, hopes that Joe Biden’s government will anyway propel markets with aid package joins the upbeat developments surrounding the virus vaccine favor risks. It should also be noted that the passage of the Brexit deal in the US House of Commons and Japan’s readiness to pump the economy amid the recent virus resurgence also keep the AUD/JPY bulls hopeful.
Against this backdrop, Wall Street benchmarks closed mildly positive around the record top marked earlier in the week whereas S&P 500 Futures is likely to keep 3,700 by the end of 2020 amid sparse trading.
Looking forward, China’s December month Manufacturing and Non-Manufacturing PMIs from the National Bureau of Statistics (NBS) will offer immediate direction to the quote. AUD/JPY buyers will look for a sustained improvement in Manufacturing PMI, expected 52.0 versus 52.1 prior, to challenge the 80.00 threshold.
Technical analysis
Unless declining back below 79.00, AUD/JPY is ready to question early 2019 tops near 79.80.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
