AUD/JPY is on the rise on rumors of US-China trade talks

• AUD/JPY is mildly bid in Asia on rumors of US-China meeting on trade.
• Risk-off in stocks is likely capping gains around 81.30.

AUD/JPY has likely picked up a bid on reports the senior White House Officials are trying to restart trade talks with China.

US tariffs on Chinese products are set to take effect on July 6 and will likely lead to a full-blown trade war between two of the world’s biggest economies of the world. Consequently, risk aversion has gripped the financial markets of late.

However, the tide may turn in favor of the equities and risk currencies like the AUD should the trade talks resume.

As of writing, the equities are not buying the rumors of US-China trade talks. This is evident from the moderate losses seen in the Asian markets. For instance, the Shanghai Composite is down 0.10 percent and the Hang Seng is reporting a 0.4 percent drop. The risk-off mood in equities is likely capping gains in the AUD/JPY around 81.30.

AUD/JPY Technical Levels

Resistance: 81.39 (5-day moving average), 81.66 (resistance on hourly chart), 82.39 (200-hour moving average).

Support: 81.00 (psychological support), 80.63 (June 19 low), 80.50 (March 23 low).