- AUD/JPY revisits sub-72.00 zone after the latest headlines from the US propelled the Japanese Yen (JPY).
- Comments from RBA’s Lowe, China’s inflation data and RBA’s quarterly monetary policy statement will be the key to follow.
Following the news reports signaling further tension between the US and China, the AUD/JPY pair fails to hold earlier recovery while trading near 71.93, after marking the low of 71.68, on early Friday morning in Asia.
As per the latest reports from Bloomberg and One America News Network (OANN), the US delays licenses to do the business with China’s Huawei while also threatening the dragon nation of ending talks and further sanctions if it uses the military to crackdown Hong Kong protests.
The headlines show the additional pressure the US exerts on China and on the global trade/political mechanism, which in turn favors the market rush towards risk-safety. Adding to the support for safe-havens, like the Japanese Yen (JPY), are growing fashion of easy money at major central banks and political tension at the Middle East, the UK and the EU.
Investors will now be closely observing speech from the Reserve Bank of Australia (RBA) Governor Philip Lowe, Japanese second-quarter gross domestic product (GDP), China’s inflation data and RBA’s quarterly monetary policy statement for fresh clues.
With many key data/events up for publishing in the next few hours, amid a fresh wave of risk aversion, expect busy market sessions going forward.
Technical Analysis
While a successful break of 72.40 can recall 73.20, pair’s further upside might not refrain from challenging June month low of 73.92. Meanwhile, a downside break of 70.70 can push bears to target 70.00.
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