Australian PMI data disappointed across the board, especially the Services PMI which plunged drastically. This dealt a fresh blow to the global economy which continues to perform worse than expected. While the US-China trade war is often cited as the cause for this, data suggests more fundamental weakness is the root cause. The AUDJPY remained stuck at resistance, how will price action develop from here? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Japanese PMI data followed in the footsteps of Australian data and came in weaker across the board with the second manufacturing PMI in contractionary territory. The Japanese Yen remained stable despite the economic disappointment. Asian data pointed towards clear weakness in the region, how will the AUDJPY trade moving forward? Today’s fundamental analysis will take a look at the upside potential as well as downside risk in this currency pair.
Here is the key factor to keep in mind today for Australian Dollar trades:
- Australian CBA Manufacturing PMI, CBA Services PMI and CBA Composite PMI: The Preliminary Australian Manufacturing PMI for October was reported at 50.1. Forex traders can compare this to the Australian CBA Manufacturing PMI for September which was reported at 50.3.The Preliminary Australian CBA Services PMI for October was reported at 50.8. Forex traders can compare this to the Australian CBA Services PMI for September which was reported at 52.4. The Preliminary Australian CBA Composite PMI for October was reported at 50.7. Forex traders can compare this to the Australian CBA Composite PMI for for September which was reported at 52.0.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Nikkei Manufacturing PMI: The Preliminary Japanese Nikkei Manufacturing PMI for October was reported at 48.5. Forex traders can compare this to the Japanese Nikkei Manufacturing PMI September which was reported at 48.9.
- Japanese Jibun Bank Services PMI and Composite PMI: The Preliminary Japanese Jibun Bank Services PMI for October was reported at 50.3. Forex traders can compare this to the previous Japanese Jibun Bank Services PMI for for September which was reported at 52.8. The Preliminary Japanese Jibun Bank Composite PMI for October was reported at 49.8. Forex traders can compare this to the previous Japanese Jibun Bank Composite PMI for for September which was reported at 51.5.
- Japanese Leading Index and Japanese Coincident Index: The Final Japanese Leading Index for August was reported at 91.9 and the Final Japanese Coincident Index was reported at 99.3. Forex traders can compare this to the previous Japanese Leading Index for August which was reported at 91.7 and to the previous Japanese Coincident Index which was reported at 99.3.
Should price action for the AUDJPY remain inside the or breakdown below the 74.000 to 74.700 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 74.300
- Take Profit Zone: 70.750 – 71.550
- Stop Loss Level: 74.800
Should price action for the AUDJPY breakout above 74.700 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 75.000
- Take Profit Zone: 76.150 – 76.750
- Stop Loss Level: 74.400
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