#AUDJPY @ 91.7080 has remained muted around 91.80 despite softening of the Australian PMI. (Pivot Orderbook analysis)

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• AUD/JPY has remained muted around 91.80 despite softening of the Australian PMI.
• Australia’s Manufacturing PMI has contracted consecutive for the seventh month to 49.8.
• Further appreciation in the Japanese Yen looks possible on an exit from BoJ’s expansionary policy.

The pair currently trades last at 91.7080.

The previous day high was 90.44 while the previous day low was 88.69. The daily 38.2% Fib levels comes at 89.77, expected to provide support. Similarly, the daily 61.8% fib level is at 89.36, expected to provide support.

The AUD/JPY pair has continued to remain sideways around 91.80 despite the release of the downbeat Australian S&P500 PMI data. Manufacturing PMI has trimmed consecutively for the seven-month to 49.8 while the street was expected an expansion to 50.3. Also, the Services PMI has dropped vigorously to 48.3 from the consensus of 49.7.

Rising interest rates by the Reserve Bank of Australia (RBA) in its fight against stubborn inflation are leading to a contraction in economic activities. The absence of easy money for firms to execute investment and expansion plans along with bleak economic demand has trimmed the scale of economic activities.

Australian economic activities could recover ahead as China is on the path of recovery now after dismantling Covid-inspired lockdown curbs. According to a note from JPMorgan, Australia’s economy could be no small beneficiary of an end to China’s zero-Covid policy over the next two years. Also, China’s reopening could boost Australia’s economy by 1%.

Going forward, the risk barometer will dance to the tunes of the Australian Consumer Price Index (CPI) data for the fourth quarter of CY2022. As per the consensus, the annual CPI is expected to escalate marginally to 7.5% from the prior release of 7.3%. While monthly inflation is seen sharply higher at 7.7% from the former release of 7.3%.

Australian Treasurer Jim Chalmers cited that the worst part of the country’s inflation crisis was over. He believes “The Australian economy will begin to soften a bit this year and that is the inevitable likely consequence of higher interest rates and a slowing global economy.”

On the Tokyo front, chatters over Bank of Japan (BoJ) Governor Haruhiko Kuroda’s successor is hogging the limelight. Analysts at Commerzbank believe that criticism of Kuroda’s expansionary monetary policy by the succession might result in further appreciation in the Japanese Yen. BoJ officials see difficulties in keeping inflation levels above 2% for a longer period despite gradually escalating CPI in Japan’s region.

Technical Levels: Supports and Resistances

AUDJPY currently trading at 91.77 at the time of writing. Pair opened at 90.32 and is trading with a change of 1.61 % .

The pair is trading above its 20 Daily moving average @ 89.92, above its 50 Daily moving average @ 91.36 , below its 100 Daily moving average @ 92.93 and below its 200 Daily moving average @ 93.09

The previous day high was 90.44 while the previous day low was 88.69. The daily 38.2% Fib levels comes at 89.77, expected to provide support. Similarly, the daily 61.8% fib level is at 89.36, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 89.19, 88.07, 87.44
• Pivot resistance is noted at 90.94, 91.56, 92.69

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