- RBA held monetary policy unchanged but gave little importance to recent positives surrounding China.
- Risk events like the US-China trade deal developments will be in highlight.
AUD/JPY trades near 79.00 during early Tuesday. The pair recently surged to the day’s high of 79.40 after the Reserve Bank of Australia (RBA) conveyed its monetary policy meeting decision.
Buyers previously took advantage of positive news reports from the US-China trade negotiation front and welcome China data, not to mention better than forecast Australian building permits. Risk events will be in highlight for fresh impulse.
The Reserve Bank of Australia (RBA) let wide expectations of holding its monetary policy unchanged with an official cash rate of 1.5%. However, the central bank refrained from praising recent change in Chinese data and chances of the US-China trade pact by giving small positive statements on the employment scenario. As a result, the Australian Dollar (AUD) declined after registering initial gains.
Earlier during the week, buyers cheered positive comments from the US Treasury Secretary Steve Mnuchin while returning from Beijing trade talk and upbeat data from Australia’s largest trading partner China.
In spite of upbeat data from the US and China coupled with brighter chances of a trade deal between the world’s two largest economies favoring risk-on, Brexit has been a drag on the risk sentiment.
The US 10-year treasury yield trades near 2.47% after marking a high of 2.5% during Monday.
With few data on hand, investors may closely observe risk events like developments surrounding the US-China trade deal and Brexit for fresh impulse.
AUD/JPY Technical Analysis
In addition to the upper-line of the short-term “rising wedge” on the hourly chart, at 79.30, 100-day simple moving average (SMA) on the daily chart at 79.50 also becomes important resistance for the AUD/JPY pair to aim for February high near 79.85 and 80.00 round-figure.
On the downside, 78.40, 78.00 and March month low around 77.50 could confine the quote’s near-term declines.
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