The Australian service sector entered a recession as measured by the AiG Performance of Services Index, which dropped below 50.0. This was countered by a much stronger retail sales report for November, and the AUDJPY added to its advance. As traders await today’s US NFP report, how will safe-haven assets perform following the release? What impact will this have on price action? Today’s fundamental analysis will take a look at price action in both directions.
Japanese household spending surprised with a monthly increase and an annualized contraction. The Japanese Leading Index and Japanese Coincident Index came in as expected, pointing towards a stagnant economy. After global tensions eased from its most recent peak, the Japanese Yen came under selling pressure. How will the AUDJPY finish the trading week? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian AiG Performance of Services Index: The Australian AiG Performance of Services Index for December was reported at 48.7. Forex traders can compare this to the Australian AiG Performance of Services Index for November, which was reported at 53.7.
- Australian Retail Sales: Australian Retail Sales for November increased by 0.9% monthly. Economists predicted an increase of 0.4% monthly. Forex traders can compare this to Australian Retail Sales for October, which increased by 0.1% monthly.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Household Spending: Japanese Household Spending for November increased by 2.6% monthly, and decreased by 2.0% annualized. Economists predicted a decrease of 9.8% and an increase of 2.5% annualized. Forex traders can compare this to Japanese Household Spending for October, which decreased by 11.5% monthly and by 5.1% annualized.
- Japanese Leading Index and Japanese Coincident Index: The Preliminary Japanese Leading Index for November was reported at 90.9 and the Preliminary Japanese Coincident Index was reported at 95.1. Economists predicted a figure of 90.9 and of 95.2. Forex traders can compare this to the Japanese Leading Index for October, which was reported at 91.6 and to the Japanese Coincident Index, which was reported at 95.3.
Should price action for the AUDJPY remain inside the or breakdown below the 75.000 to 75.600 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 75.350
- Take Profit Zone: 72.450 – 73.350
- Stop Loss Level: 75.950
Should price action for the AUDJPY breakout above 75.600 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 75.950
- Take Profit Zone: 76.500 – 76.950
- Stop Loss Level: 75.600
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