The Australian Dollar hovered near support levels despite a surprise drop in the CBA Services as well as Composite PMI’s for August. This morning’s data was the latest sign that the global economy extends it slowdown which has increased hopes for more stimulus around the world. The AUDJPY pushed above its horizontal support area as bullish momentum rose. Can this breakout lead to more upside potential in this currency pair. Subscribe to the PaxForex Daily Fundamental Analysis and join one of the fastest growing trading communities in the forex market.

Further erasing bullish momentum during the Asian trading session were two economic reports out of Japan which indicated the economy is slowing. The Nikkei Manufacturing PMI clocked in below 50, indicating an extension of the contraction while the All Industry Activity Index plunged by 0.8%. The Bank of Japan has hinted that it will not tolerate a strong Japanese Yen as it hurts its export focused economy. Will forex traders rotate out of long Japanese Yen trades and how will this impact price action in the AUDJPY? This morning’s fundamental analysis will take a look in both directions.