- AUD/JPY keeps portraying market’s favor for safe-havens amid US-China trade tension.
- Traders await fresh clues to revisit the key support area during thin flow of catalysts t the week’s start.
Even if trade war jitters keep exerting downside pressure on the AUD/JPY pair, the quote awaits fresh clues to extend the south-run towards the key support-area including lows marked last-week and during January. The pair currently takes the rounds to 71.65 during early Monday morning in Asia.
Following the US-led increased difficulties for China’s Huawei, coupled with the dragon nation’s silent retaliation via halting the US farm product’s imports, clouds over the US-China trade deal have mounted. On nearby scenario, this reduces the odds for any further talks between the world’s two biggest economies and propels chances of an upcoming global recession.
In response to this, headline central banks have already started slashing their benchmark interest rates and/or turn dovish during recent appearances.
As a result, market risk sentiment has been sluggish with treasury yields mostly being down. The spread between the yields of the US 10-year and 3-month bonds is on the verge of indicating a recession.
However, pair remains modestly unchanged during early Asian session awaiting fresh clues after the weekend tweets from the US President Donald Trump and its reaction by the Global Times’ editor in-Chief Hu Xijin. It should also be noted that the absence of any major data/events adds to the lack of catalysts for fresh moves.
Technical Analysis
While 71.40 and 71.23 are likely nearby supports holding the key pair’s plunge towards 70.75/70 area, pair’s further declines need to break 70.00 round-figure to please the bears. Meanwhile, 72.75 and 73.20 seem immediate resistances, a break of which can recall buyers targeting June month low near 73.92.
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