RBA minutes due at 0130 GMT
AUD/JPY slumped as low as 79.89 yesterday, just above the July low of 79.84. It’s since rebounded 30 pips but remains within the danger zone as we count down to the minutes of the August 3 RBA decision.
For me, this chart doesn’t look great. The temptation is to blame it on domestic covid concerns in Australia but I worry that global growth is the driver. It’s not the only chart that is on the precipice of breaking lower (EUR/JPY is another)
For me, the RBA minutes aren’t that big of a concern but tomorrow’s US retail sales data and China are. It’s tough to see how the risk trade in FX going to turn quick enough to halt a breakdown in AUD/JPY.
