- AUD/JPY clings to August-start high.
- Broader risk-on, trade-positive headlines favored the pair previously.
- Trade/Brexit will be in the spotlight amid Japan’s holiday, no major data/event from Australia.
A holiday at Japan joins an absence of major data/events on the economic calendar to question the AUD/JPY pair’s rise to an 11-week high. The quote seesaws near 74.60 by the press time of early Tuesday morning in Asia.
Bulls cheered upbeat market sentiment over the US-China trade deal while shrugging off the United Kingdom’s (UK) House Speaker John Bercow’s rejection of the Meaningful Vote on the Prime Minister Boris Johnson’s Brexit deal. Adding to the rise could be the overall strength of the commodity-linked currencies backed by the US Dollar (USD) weakness.
Odds of the US-China trade deal were earlier hiked by the United States (US) President while the White House Economic Adviser Larry Kudlow’s comments added fuel to the risk-on. Elsewhere, some of the UK’s Members of the Parliaments (MPs) readies to support the PM’s Brexit deal and there prevails a second reading of the Withdrawal Agreement (WA) bill, which in turn dims negatives out of Speaker Bercow’s rejection.
Against the move was the US President Trump’s statement increasing the chances of a Senate trial on his impeachment by the Democrats.
With this, Wall Street pleased buyers while the US 10-year Treasury yields also rose past-1.8%.
Moving on, Japanese markets are off as Emperor Naruhito will proclaim his enthronement. Further, no major Aussie data is up for publishing and hence the trade/Brexit news will keep dominating market sentiment.
An area comprising early-July lows close to 75.10/20 seems to be the immediate upside barrier for the pair ahead of the 200-day Exponential Moving Average (EMA) level of 75.64. On the downside, September high of 74.50 challenges sellers targeting 100-day EMA level of 74.00.