- AUD/JPY registers mild losses following the mixed data.
- China’s GDP and Retail Sales remained dismal but Industrial Production offers a positive surprise.
- Updates on the cure to the pandemic, the US economic restart favor the risks.
- Japan Industrial Production and the coronavirus updates will be the key to watch, for now.
AUD/JPY drop from 68.70 to 68.60, currently around 68.66, after China data flashed mixed messages during early Friday. While GDP fell below -6.5% forecast to -6.8% on QOQ, better than expected -7.3% Industrial Production figures of -1.1% seem to confuse the traders.
Read: China’s GDP contracts 6.8% YoY in Q1 vs. -6.5% expected, AUD/USD little changed
Early in Asia, news that the clinical trials on the Gilead’s Remdesivir offer promising results fuelled the risk-on. The mood got additional support from US President Donald Trump’s expectations of the receding death toll while sharing guidelines to re-open the economy in a phased manner.
As a result, the US 10-year treasury yields reverse the previous day’s downside with more than seven basis points (bps) of gains to 0.683% while Australia’s ASX 200 surge to fresh four-year high by the press time.
Given the initial reaction to China data, traders will now focus on Japan’s Industrial Production for February, expected to remain unchanged at 0.4% on MoM, for fresh impulse. Even so, virus updates will remain as the key driver.
Technical analysis
Not only 50-day SMA level around 69.00 but February 28 low close to 69.37 also questions the buyers. On the downside, 21-day SMA near 66.90 limits near-term declines.
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