AUD/JPY remains pressured below 70.00 after Aussie Wage Price Index
- AUD/JPY ignores Australia’s Q1 Wage Price Index.
- Risk aversion weighs on the pair, trade war with China, fears of virus resurgence are the main catalysts.
- RBNZ can offer immediate direction while qualitative catalysts to remain on the driver’s seat.
AUD/JPY seesaws around 69.30, down 0.06% on a day, after Australian data matched market consensus on early Wednesday. Even so, the pair remains pressured due to the broad risk aversion.
Australia’s first quarter (Q1) Wage Price Index matches 2.1% forecast, down from 2.2% prior, on YoY basis while also repeating 0.5% figures for QoQ.
Earlier during the day, Westpac Consumer Confidence for May gained 16.6% versus -17.7 prior. Though, the data failed to recall buyers, except for initial pullback, amid risk-off mood.
The global markets have been risk-averse off-late. The reason could be traced from China’s fight against the US and Australia. While the US seems to have an upper hand over the dragon nation, the Aussie PM Scott Morrison’s push for an investigation into the virus outbreak likely levied a ban on meat exports.
Elsewhere, the resurgence in the coronavirus (COVID-19) cases from Germany and Wuhan seems to flash an early warning to the Pacific nations that are cheering the full-fledged return.
Amid all these plays, US 10-year Treasury yields drop further below 0.70% to 0.66% whereas Japan’s NIKKEI and Australia’s ASX 200 also flashed losses of over 1.0% by the press time.
Given the lack of any major directives from either Australia or Japan for the rest of the day, the pair traders may keep eyes on the trade/virus updates for near-term direction.
Technical analysis
The pair’s recent pullback from the key EMA keeps sellers hopeful while targeting a confluence of 50-day EMA and 61.8% Fibonacci retracement of February-March fall, near 68.90/85. On the contrary, a daily closing beyond 100-day EMA level of 70.11 won’t be sufficient for the pair to aim for March month high of 71.52 as April peak near 70.20 will validate further upside.