- Positive developments surrounding the US-China trade deal favored risk sentiment off-late.
- Break of 100-day SMA indicates momentum strength unless 79.30 holds.
In spite of trading beyond 100-day simple moving average (SMA) for the first time in four months, the AUD/JPY pair struggles to hold the gains and trades near 79.40 during early Friday. The quote previously took advantage of upbeat developments surrounding the US-China trade negotiations but is now looking for fresh clues to extend its recent rise.
Chinese Vice Premier Liu He’s visit to Washington gives many headlines off-late. ANZ recently reported that the dragon nation has acknowledged the issues the US has regarding intellectual property theft, forced technology transfer and cyber hacking. Also, the US President Donald Trump was on wires claiming 4 to 6 weeks of time required to come up with the US-China trade deal that’s in its final stages of discussions.
AUD/JPY has managed to remain positive for the most part of the current week as optimism surrounding the trade deal between the US and China joined hands with welcome data from both the economies.
The US 10-year treasury yields, a barometer to market risk sentiment, leveled up from last week’s low of 2.35% to 2.51%.
Looking forward, developments surrounding the US-China trade talks will be crucial for markets to watch. Also in the limelight will be February month leading economic index from Japan. The sentiment gauge is likely to have improved to 97.3 from 95.9.
AUD/JPY Technical Analysis
Having breached 79.35/30 resistance comprising 100-day SMA, AUD/JPY may rise towards an upward sloping trend-line that joins the highs marked since March 22, at 79.65/70 now. Given the prices rally above 79.70, 80.00 could become buyers’ next target.
On the downside break of 79.30, 79.00 and 50-day SMA level of 78.80 could become immediate supports for traders to observe whereas an ascending support-line from March 25 could challenge bears around 78.70 then after.
Share
