FxWirePro: AUD/JPY Daily Outlook

Chart - Courtesy Trading View 

AUD/JPY was trading 0.44% lower on the day at 91.37 at around 09:00 GMT, upside remains capped at daily cloud.

The release of downbeat preliminary Australian S&P PMI data seems to have weighed on the Aussie pair.

Data released earlier on Tuesday showed Australian Manufacturing PMI fell consecutively for the seven-month to 49.8 missing expectations for an expansion to 50.3. 

Also, the Services PMI has dropped to 48.3, missing the consensus of 49.7. 

That said, the Reserve Bank of Australia is expected to continue its restrictive monetary policy despite a contraction in economic activities.

Focus going forward will be on the release of the Australian Consumer Price Index (CPI) data for the fourth quarter of CY2022 on Wednesday.

The annual CPI is expected to rise further to 7.5% from the prior release of 7.3%. While monthly inflation is seen sharply higher at 7.7% from the prior release of 7.3%.

On the other side, mixed Japan PMI data along with hawkish concerns surrounding the Bank of Japan’s (BOJ) next move add to downside bias for the pair.

AUD/JPY has turned lower after rejection at daily cloud. Price action is testing 55-EMA support at 91.22. 

Break below 55-EMA will drag the pair lower. Next major support lies at 21-EMA at 90.32. Upside potential only on break above daily cloud.