Source: PaxForex Premium Analytics Portal, Fundamental Insight

Source: PaxForex Premium Analytics Portal, Fundamental Insight

Source: PaxForex Premium Analytics Portal, Fundamental Insight

Source: PaxForex Premium Analytics Portal, Fundamental Insight

The Australian Dollar came under mild selling pressure after a report showed that private sector credit eased. Adding to bearish momentum was an unexpected acceleration in the rate of contraction in the Chinese manufacturing sector. The services sector also slowed down which added to growth concerns. How will the AUDJPY trade as more global economic data will trickle in throughout the session? Today’s fundamental analysis will take a look at price action in both directions.

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.

The Australian central bank delivered its 25 basis point interest rate cut from 1.00% to 0.75%. This was expected by market participants following the release of minutes from the previous RBA meeting. The announcement was preceded by a surprise increase in the Australian manufacturing sector as confirmed by two different reports. The housing market remains under pressure which could impact the consumer moving forward. The AUDJPY started to contract, will this move extend further to the downside?

New tariffs kicked in yesterday as the US and China both implemented their previously announced measures. China opted to implement tariffs to only about one-third of the 5,000 goods on the list with the rest scheduled for December 15th 2019. The US has also delayed tariffs on plenty of consumer goods until that day in order to bridge the key shopping season in the US. Chinese manufacturing data for August surprised to the upside and expanded against expectations for a contraction.

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.

Inflation picked up in Australian in the second-quarter of 2019, but is still well bellow the RBA’s 2.0% target. As the Australian central banks is turning more dovish in order to support the economy, private sector credit slowed down to a near halt in June. The Australian Dollar drifted higher during the Asian trading session as the Chinese Composite PMI rose slightly in July, the Manufacturing PMI improved but remained in contractionary territory and the Services PMI slide further. Can the Australian Dollar recover further to the upside?

Following the meeting between US President Trump and Chinese President Xi this weekend, both leaders agreed to a truce and more trade talks. Forex traders had little time to digest the announcement as Chinese PMI data came in weaker than expected as the global economic slowdown continues. This was further confirmed by Australian Manufacturing PMI data which came in mixed. The AUDJPY paused its rally, but will this be temporary before the advance extends with a breakout or are bears preparing for a price action reversal?

Inflationary expectations in Australia decrease for June, but this morning’s attention was solely on the employment report for May. The headline figure came in strong on the back of part-time job creation while full-time positions posted a small increase. The unemployment rate remained unchanged at 5.2%, but the labor force participation rate increased. The Australian Dollar accelerated to the downside and back into strong support levels with technical indicators flashing extreme oversold conditions.

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.

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here is the key factor to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here is the key factor to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades:

Here are the key factors to keep in mind today for Australian Dollar trades: