AUD/JPY rises to 10-day SMA as S&P 500 futures trim losses

• S&P 500 futures trim losses, helping AUD/JPY regain poise. 
• Japan’s retail sales recorded a double-digit decline in May. 
• Coronavirus fears will likely cap gains in AUD/JPY. 

AUD/JPY has recovered nearly 30 pips from session lows to test the 10-day simple moving averages (SMA) at 73.60. 

The pair’s bounce from the session low of 73.32 could be associated with the recovery in the S&P 500 futures, which are currently trading 0.20% lower on the day at $3,000, having printed a low of $2,984 early Monday. 

In addition, e dismal Japanese Retail Trade data released an hour ago may have helped AUD/JPY rise to the 10-day SMA. Consumer spending, as represented by Retail Trade, fell 12.3% year-on-year in May compared to an expected decline of 11.6%. 

The relief in both AUD/JPY and the US stock futures needs to be viewed with caution as the global coronavirus toll continues to climb. 

The number of cases across the globe rose above 10 million over the weekend. The US posted record virus cases for the third straight day on Saturday and Tokyo recorded 60 new cases on Sunday, the highest daily tally since May 4. Meanwhile, as per the latest report, the positive test rate in the US state of Texas jumped to a record 14.31% on Sunday. 

These numbers will likely cap the upside in the risk assets, thereby limiting losses in the anti-risk yen. Note that the S&P 500 futures had gapped lower in early Asia, pushing AUD/JPY down to 73.32 on virus fears. 

Technical levels