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  • AUD/JPY marks the intra-day high, bounces off the four-day low.
  • China’s inflation numbers rise beyond upbeat market forecasts.
  • Coronavirus keeps weighing on the market’s risk-tone despite exhaustion in the latest cases.

AUD/JPY rises to 73.35 after China released January month inflation data on early Monday. In doing so, the quote snaps the previous two-day declines while also bouncing off the four-day low. However, risk-tone remains heavy and could weigh on the prices based on China’s coronavirus update.

China’s January month Consumer Price Index (CPI) and Producer Price Index (PPI) register noticeable strength in price pressures. The CPI grew beyond a 4.9% forecast and 4.5% to 5.4% on YoY while also crossing 0.8% expected to 1.4% on MoM. Further details suggest that the PPI match 0.1% market consensus against -0.5% prior.

Read: Chinese CPI YoY (Jan): 5.4% vs 4.9% expected and 4.5% prior, (fastest rise since Oct 2011)

Market’s risk-tone again turned heavy on Friday after global producers rang alarm of demand-supply deficiency due to the epidemic. The trade sentiment further deteriorated as the death toll crosses the 2002/03 SARS contagion and the US Federal Reserve also cited global risk due to coronavirus.

The latest update suggests the death toll crossed 900 mark while the infected cases rallied to 40,171 by February 09. Even if the latest pattern suggests exhaustion of overall cases/deaths in China, the epicenter of the disease, Hubei, continues to add to the numbers and raise worries.

With this, the US 10-year treasury yields remain sluggish around 1.57% with the S&P 500 Futures liquidating 0.30% to 3,316 by the press time.

With a little data on hand, traders will now concentrate on coronavirus updates for fresh impulse.

Technical Analysis

Unless breaking a confluence of 100/200-day SMA near 74.30/35, AUD/JPY prices can’t avoid visiting an upward sloping trend line since October 02, 2019, at 72.50 now.