- AUD/JPY refreshes intraday low after Australia’s S&P Global PMIs for June.
- Manufacturing, Services PMIs came in firmer, Composite PMI eased during the stated month.
- Sluggish markets add strength to the pair’s inaction ahead of Japan PMIs, inflation data.
AUD/JPY takes offers to refresh daily lows on mixed Aussie PMI data for June. That said, the cross-currency pair retreats to 94.15 by the press time of early Thursday morning in Asia, extending the previous day's pullback from a two-week high.
Preliminary readings of Australia’s S&P Global PMIs for June came in mixed as the Manufacturing and Services PMIs rose past market forecasts and priors but the Composite PMI eased below the previous readouts. The Manufacturing PMI rose to 55.8 versus 54.7 expected and 55.7 prior whereas the S&P Global Services PMI rose past 49.1 market consensus to 52.6, versus 53.2 previous readings. It should be noted that the Composite PMI eased below 52.9 to 52.6 in June.
It’s worth noting that the market’s inaction also appears to weigh on the risk barometer cross-currency pair. Given the latest indecision following the Fed Chair Jerome Powell’s Testimony and the fears of recession, as well as aggressive monetary policy actions, traders await clear directions.
Federal Reserve (Fed) Chairman Jerome Powell’s justification for the recent rate hike, the biggest since 1994, managed to gain acceptance, at least during the first round of the Testimony on the bi-annual Monetary Policy Report. However, Powell’s rejection of the need for a heavy rate increase seemed to exert downside pressure on the greenback afterward.
Amid these plays, Wall Street managed to pare the day-start losses but ended Wednesday with mild losses whereas the US 10-year Treasury yields marked the biggest daily fall in a week by ending the day at around 3.16%. That said, the S&P 500 Futures print mild losses by the press time.
Looking forward, Japan’s first readings of Jibun Bank PMIs for June and Friday’s inflation data will be crucial as the Bank of Japan (BOJ) keeps resisting higher rates despite the weaker yen.
Technical analysis
Unless breaking the 93.80 support confluence including the 21-DMA and a six-week-old support line, AUD/JPY bears remain off the table.
