AUD/JPY drops 23 pips after Aussie capex release

• Aussie Q4 capex unexpectedly declined.
• Aussie dollar feels the heat.
• However, downside capped by slightly upbeat forward-looking capex numbers.

The already weak AUD/JPY pair extended losses by 23 pips to 82.45 - the lowest level since June 2017, after the Australian Bureau of Statistics (ABS) reported a drop in the fourth quarter capital expenditure (capex).

The Aussie suffered moderate losses across the board immediately after the data release. However, relatively upbeat details are now lending a helping hand to the AUD.

The details of the report show the capex estimate for 2018-19 is $84,044 million - up 3.5 percent compared to estimate 1 for 2017-18. Further, the fifth estimate for 2017-18 ($114,559 million) is 2.5% higher than Estimate 5 for 2016-17. Estimate 5 is 4.9% higher than Estimate 4 for 2017-18.

As of writing, the currency pair is trading at 82.55. However, the slight recovery from the intraday lows could be short-lived if the Asian and European equities take cues from the 380 point decline in the US stocks.

AUD/JPY Technical Levels

A break below 82.00 (psychological level) would open up downside towards 81.75 (June 2017 low) and 81.49 (April 2017 low). On the higher side, breach of resistance at 82.83 (session high) could yield a corrective rally to 83.32 (Feb. 14 low) and 83.34 (5-day MA).