AUD/JPY pops and drops below 75.00 after Aussie Jobs report

  • AUD/JPY fails to keep the uptick to 75.00 after Aussie Unemployment Rate matches downbeat forecast.
  • Market’s risk-tone dwindles amid recent worries concerning the Sino-American relations.
  • A busy day ahead with Chinese GDP be the immediate catalyst.

AUD/JPY declines to 74.80 during Thursday’s Asian session. The pair recently seesawed around 75.00 after Australia’s June month employment data cited mixed figures. In doing so, the quote snaps the previous three-day winning streak.

While Aussie Employment Change crossed 112.5K expected with 210.8K, traders might have taken clues from Unemployment Rate that met market consensus of 7.4% versus 7.1% prior.

Read: Breaking: Aussie June employment beats expectations, AUD whippy in H&S formation 

Earlier during the day, Foreign Investments in Japan Stocks for the period ended on July 10 rose from ¥-77 B to ¥+67.2 B with Foreign Bond Investment surging past ¥-520.7 B to ¥1065.7 B.

Talking about the risk catalysts, the pair recently shrugged off the escalation in the US-China tussle followed by signals that the Trump administration is considering sweeping sanctions on the key diplomats from Beijing. The news follows previous headlines indicating the US policymakers’ investigations of the Chinese apps and Beijing’s readiness to retaliate American interference in Hong Kong matter.

Furthermore, the surge in Victoria’s virus figures and fears of further hardships in Tokyo residents, after the highest alerts due to the pandemic, added to the risk reset.

As a result, the market’s previous optimism, backed by hopes that the COVID-19 vaccine, seems to fade and the same could be witnessed in S&P 500 Futures’ pullback from the late-February top. Also portraying the shift in trading sentiment are mild losses by Japan’s Nikkei 225 and Australia’s ASX 200.

Moving on, traders will keep eyes on China’s data dump, including second quarter (Q2) GDP, June month Industrial Production and Retail Sales, for immediate direction. Although forecasts suggest further recovery of the AUD/JPY prices, any disappointment from the data will not be taken lightly and can add a burden to the market’s risk sentiment.

Technical analysis

An upward sloping trend line from June 12 and 21-day SMA increases the importance of $74.25 as the key support. On the contrary, bulls move gradually towards June month’s top of 76.79 with 75.00 and 75.60 acting as intermediate halts.

 

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