Economic data released out of Australia this morning showed a further decrease in its manufacturing sector as well as a plunge in job advertisements and a further deterioration of house prices. This caused inflationary pressures to ease. Inventories rose as company profits decreased, but the Australian Dollar was able to advance as a report showed that the Chinese manufacturing sector performed better than expected. The AUDJPY was able to move higher from strong support levels as Chinese data trumps domestic data for the time being due to the Chinese Yuan proxy trade for which the Australian Dollar is used. Make sure to remain up-to-date with the release of our fundamental analysis in order to remain ahead of the curve.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian AiG Performance of Manufacturing Index: The Australian AiG Performance of Manufacturing Index for May was reported at 52.7. Forex traders can compare this to the Australian AiG Performance of Manufacturing Index for April which was reported at 54.8.
- Australian CBA Manufacturing PMI: The Final Australian CBA Manufacturing PMI for May was reported at 51.0. Economists predicted a figure of 51.1. Forex traders can compare this to the previous Australian CBA Manufacturing PMI for May which was reported at 50.9.
- Australian CoreLogic House Prices: Australian CoreLogic House Prices for May decreased by 0.4% monthly. Forex traders can compare this to Australian CoreLogic House Prices for April which decreased by 0.5% monthly.
- Australian ANZ Job Advertisements: Australian ANZ Job Advertisements for May decreased by 8.4% monthly. Forex traders can compare this to Australian ANZ Job Advertisements for April which increased by 0.2% monthly.
- Australian Inventories and Company Operating Profits: Australian Inventories for the first-quarter increased by 0.7% quarterly and Australian Company Operating Profits increased by 1.7% quarterly. Economists predicted a flat reading of 0.0% and an increase of 2.8%. Forex traders can compare this to Australian Inventories for the fourth-quarter which decreased by 0.2% quarterly and to Australian Company Operating Profits which increased by 2.8% quarterly.
- Australian TD Securities Inflation: Australian TD Securities Inflation for May was reported flat at 0.0% monthly and increased by 1.7% annualized. Forex traders can compare this to Australian TD Securities Inflation for April which increased by 0.2% monthly and by 1.8% annualized.
- Chinese Caixin Manufacturing PMI: The Chinese Caixin Manufacturing PMI for May was reported at 50.2. Economists predicted a figure of 50.0. Forex traders can compare this to the Chinese Caixin Manufacturing PMI for April which was reported at 50.2.
- Australian RBA Commodity Index: The Australian RBA Commodity Index for May is predicted to increase by 12.8% annualized. Forex traders can compare this to the Australian RBA Commodity Index for April which increased by 14.4% annualized.
Japanese data showed an increase in capital spending as companies upgrade their infrastructure which led to a rise in profits, but sales came in softer than expected. The final reading on the Japanese manufacturing sector for May showed that it continued to contract which caused forex traders to book profits in the Japanese Yen. Will the AUDJPY be able to extend its move higher or are sellers ready to step back in?
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Company Profits and Japanese Company Sales: Japanese Company Profits for the first-quarter increased by 10.3% annualized and Japanese Company Sales increased by 3.0% annualized. Forex traders can compare this to Japanese Company Profits for the fourth-quarter which decreased by 7.0% annualized and to Japanese Company Sales which increased by 3.7% annualized. Japanese Capital Spending for the first-quarter increased by 6.1% annualized and Japanese Capital Spending excluding Software increased by 6.9% annualized. Economists predicted an increase of 2.6% and of 2.3%. Forex traders can compare this to Japanese Capital Spending for the fourth-quarter which increased by 5.7% annualized and to Japanese Capital Spending excluding Software which increased by 5.5% annualized.
- Japanese Nikkei Manufacturing PMI: The Final Japanese Nikkei Manufacturing PMI for May was reported at 49.8. Forex traders can compare this to the previous Japanese Nikkei Manufacturing PMI May which was reported at 49.6.
Should price action for the AUDJPY remain inside the or breakout above the 74.950 to 75.450 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 75.200
- Take Profit Zone: 78.000– 78.900
- Stop Loss Level: 74.500
Should price action for the AUDJPY breakdown below 74.950 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 74.750
- Take Profit Zone: 73.400 – 74.100
- Stop Loss Level: 75.200
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