AUD/JPY stuck at 50-DMA ahead of China PMI & RBA rate decision

AUD/JPY is having a tough time taking out the resistance offered by the 50-DMA at 87.22 as the AUD traders await China services PMI data and RBA rate decision. 

China Caixin Services PMI for August is seen printing at 51.8 vs. previous month’s figure of 51.5. A strong data might boost the demand for the Aussie. Following the China data, the focus would shift to RBA rate decision. 

The central bank is widely expected to keep rates on hold. Traders would scan the policy statement for the latest economic projections and comments on the strong exchange rate. There is widespread belief that the central bank would attempt to jawbone the AUD. 

Meanwhile, the Japanese side of the story depends on the sentiment in the equity markets. South Korea halts the three-day decline in early trade. However, the S&P500 futures are down 7 points or 0.30%. Positive action in the equity markets would weigh over the low yielding Japanese Yen and vice versa. 

AUD/JPY Technical Levels

The currency pair was last seen trading around 87.10 levels. A break below 87.01 [10-DMA] would open doors for a sell-off to 86.79 [4-hour 100-MA] and 86.33 [Aug 17 low]. On the higher side, breach of hurdle at 87.22 [50-DMA] would expose 87.57 [previous day’s high] and 87.81 [Aug 30 high].