USDJPY – Daily Chart – 031025
Read the full USD/JPY forecast, including chart setups and trade ideas.
As traders consider the BoJ’s views on recent Japanese economic data, attention remains on the AUD/USD as Aussie data clouds the RBA’s policy outlook.
Aussie Services PMI and the Aussie Dollar in the Spotlight
Turning focus to the AUD/USD pair, the S&P Global Services PMI dropped from 55.8 in August to 52.4 in September, up from a preliminary 52.0.
Slower services sector activity could weigh on the Aussie economy, given that the sector contributes between 60% and 70% to the GDP.
Notably, employment and price trends diverged, further complicating the RBA’s monetary policy outlook. While job growth accelerated to a five-month high, inflation cooled.
Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, commented on the September survey, stating:
“On the price front, the easing of service sector output price inflation is a welcome development in supporting demand and in providing some room for monetary policy to further loosen before the end of the year.”
AUD/USD: Key Scenarios to Watch
Bearish AUD/USD Scenario: Dovish RBA chatter and rising trade tensions may drag AUD/USD toward the 50-day EMA and $0.655.
Bullish AUD/USD Scenario: Hawkish RBA comments and easing trade friction could drive AUD/USD toward $0.665.
See our full AUD/USD analysis for detailed trends and trade setups.
US Services and Interest Rate Differentials
Amid lingering uncertainty about the timeline for an RBA rate cut, US services sector data could influence the number of Fed rate cuts in the fourth quarter.
A higher PMI, combined with rising prices and employment, could reduce bets on Fed rate cuts. A more hawkish Fed policy stance would widen the interest rate differential, favoring the US dollar. A wider rate differential may push AUD/USD toward the 50-day EMA and $0.655.
On the other hand, a lower PMI, falling prices, and job cuts could support multiple Fed rate cuts in the fourth quarter. A narrowing interest rate differential, favoring the Aussie dollar, could send AUD/USD toward $0.665.
AloJapan.com