- AUD/JPY struggles to justify a hike in trade balance as import/export slid.
- The US escalates efforts to counter coronavirus, California declares the emergency.
- Japan is yet to announce any response to the COVID-19 despite likely major negative impact.
With the Aussie trade balance crossing lines with import/export details, AUD/JPY seesaws around 71.20, 0.0% change from the previous day, during the Asian session on Thursday.
Read: Australia Jan balance goods/svcs a$+5,210 mln, s/adj (reuters poll: a$+4,800 mln)
The reason for the pair’s less reaction to the data could be traced from the market’s risk-reset.
While leading the global fight against the deadly virus, the US announced roughly $8 billion emergency spending bill as well as announced alternations to bank capital reserve requirements.
In addition to the diplomats’ efforts to tame the negative economic impact of COVID-19, the US Fed member James Bullard’s latest comments turning down call of any further rate cuts this month also favored the risk-tone.
However, a state of emergency in California and downbeat concerns raised by the Australian and South Korean policymakers seem to keep the risk-tone under pressure.
That said, the trading sentiment remains mildly positive with the US 10-year treasury yields extending Wednesday’s recovery to 1.028% whereas Japan’s NIKKEI rises 1.0% during the early Tokyo trading.
Amid the lack of major data/events on the economic calendar, investors will keep eyes on the coronavirus headlines for near-term direction.
Technical Analysis
A confluence of October 2019 low and 10-day EMA around 71.70/75 and a downward sloping trend line since November 2019, at 72.05, act as the key upside barriers for the pair. On the contrary, 70.30 and 70.00 could entertain short-term sellers.
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