AUD/JPY fails just below 87.00 post-China PMI, Trump eyed

The AUD/JPY cross ran into offers and slipped sharp from daily tops reached just shy of 87 handle, as markets digest better-than expected Caixin China’s manufacturing PMI report.

AUD/JPY back below 20-DMA

The AUD/JPY pair advances +0.39% to 86.69, easing-off three-day highs reached at 86.87. The cross jumped to daily highs in a knee-jerk reaction to solid Chinese manufacturing numbers, however, quickly surrendered a part of the gains, as investors look to take profits off the table ahead of the US President Trump’s Congressional address.

Earlier on the day, AUD/JPY rallied hard in response to stronger Australia’s Q4 GDP data, which arrived at 1.1% q/q versus 0.7% expectations. Also, at the same time, broad yen weakness amid a better risk sentiment collaborated to the upbeat tone behind the cross.

Technical Levels

Higher side: 87 (round figure), 87.58 (daily S3)

Lower side: 86.22 (50-DMA), 85.01 (100-DMA)