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  • AUD/JPY, the risk barometer, hit one month high of 83.68 in Asia.
  • US and China put trade war on hold, put a bid under the risk assets.

The AUD/JPY rose to 83.68 in Asia – the highest level since April 19 as fading US-China trade tensions strengthened the bid tone around the risk assets like the AUD and weakened demand for the anti-risk Japanese Yen.

The US stock futures picked up a bid after Treasury Secretary Mnuchin said the US and China have decided not to impose punitive tariffs and are drafting a framework to address imbalances in the future. As of writing, the S&P 500 futures are up 16 points or 0.60 percent. The risk-on in the US stock futures also lifted the major Asian indices.

Consequently, the anti-risk Japanese Yen dropped across the board, pushing the AUD/JPY higher to one-month highs.

The uptick in the AUD/JPY cross, a risk barometer, in a way adds credence to the uptick in the S&P 500 futures and Asian stocks and indicates high probability the European stocks will follow suit.

AUD/JPY Technical Levels

The pair will likely face resistance at 84.08 (April 13 high), and 84.25 (100-day moving average). A close above that level would cement expectations of the further rally towards 985.64 (200-day moving average).

On the downside, ascending 5-day moving average (MA) and the 10-day MA located at 83.08 and 82.59 could act as strong support levels. A close below the 10-day MA would abort the bullish view and could yield consolidation.