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  • AUD/JPY surges to intra-day high after the Australian jobs report.
  • Yield curve inversion, trade/political news dominate risk sentiment.
  • Japan’s Industrial Production will be the next to watch.

With better than expected Australian Employment Change, AUD/JPY trades near 71.70, after flashing an intra-day high of 71.93, during early Thursday.

Australia’s employment data for July flashed an overall upbeat signal of the economy as the Employment Change rose beyond 14.0K forecast to 41.0K, with an increase in Fulltime Employment to 34.5K from 21.1K prior, whereas Unemployment Rate remained stable to 5.2%. Adding to note is the increase in Participation Rate to 66.1% from 66.0% market consensus.

Having witnessed an inversion of the US 10-year and 2-year treasury yield curves, markets see some improvement in the risk sentiment as latest tweets from the US President Donald Trump indicate additional relief in the US-China relation via the change in a stand in the Hong Kong matter.

Also on the positive side is the South China Morning Post (SCMP) news that Beijing sees a positive signal in the US President Donald Trump’s latest delay of tariffs on some of the Chinese goods.

While trade/political news will keep dominating market momentum, investors will also keep an eye over Japan’s June month Industrial Production data for immediate direction. It should be noted that no change is expected in the YoY and the MoM figures of -4.1% and -3.6% respectively.

Technical Analysis

While 100-hour moving average (HMA) and 23.6% Fibonacci retracement of July-end to early-August downpour limits the quote’s immediate upside around 71.70/71, monthly high surrounding 72.90 and June month low of 73.92 can please buyers during further recovery. On the flip side, 70.74 holds the key to pair’s slump to 70.00.