- AUD/JPY stays on the front foot after upbeat Australia Construction Work Done.
- RBA policymakers, trade headlines favored the quote’s recent upside.
- Trade/political headlines will be in the spotlight amid a lack of major data/events at home.
AUD/JPY benefits from the upbeat Australian data while taking the bids to 74.10 during the Asian session on Wednesday.
Australia’s Construction Work Done for the third quarter (Q3) rose past -1.0% expectations and upwardly revised -2.8% prior to -0.4%. The Australian dollar (AUD) gains after the data and the AUD/JPY pair portrays the same move.
The pair recently benefited from the upbeat comments via the Reserve Bank of Australia (RBA) officials, not to forget positive sentiment surrounding the trade deal between the United States (US) and China. RBA’s Deputy Governor Guy Debelle failed to provide any clear policy guidelines while saying that he sees steady wage growth over the next couple of years. On the other hand, RBA Governor Philip Lowe turned down the scope of Quantitative Easing (QE) but stood prepared to take all action if unemployment rises rapidly and inflation falls further.
The trade headlines from the US have been mostly upbeat with President Donald Trump signaling nearness to the much-awaited deal with China. Though, recent stories from South China Morning Post (SCMP) emphasize the need for US action and question the risk-on sentiment.
Even so, the US 10-year treasury yields and the S&P 500 Futures stay positive while taking rounds to 1.75% and 3,144 by the press time.
Looking forward, Comments from the Bank of Japan’s (BOJ) board member Makoto Sakurai can offer intermediate moves whereas the US-china trade headlines will keep the driver’s seat.
Technical Analysis
The pair needs to provide a daily closing beyond the 21-day Exponential Moving Average (EMA) level of 74.12 while aiming the previous week’s high near 74.32. Further, November 07 low of 74.56 can act as additional resistance that could open gates for the pair’s rise to monthly high near 75.70. Meanwhile, monthly bottom close to 73.35 keeps sellers away.
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