- AUD/JPY seesaws near 50-DMA as concerns over fresh US-North Korea tussle confront likely positive sentiment surrounding US-Iran relations.
- Speech from RBA’s Governor, trade/political headlines will be in the spotlight for fresh direction.
Mixed clues from latest political news concerning North Korea and Saudi Arabia fail to provide any clear direction to the AUD/JPY pair that presently clings to 50-day moving average (DMA), around 75.50, during early Thursday.
While North Korea’s test-firing of two missiles may trigger fresh geopolitical tussle between the US and the hermit kingdom, news that the US President Donald Trump used his Veto to continue arms selling to Saudi Arabia can ease some geopolitical tension off the market.
Also, the latest developments surrounding the US-China trade are also positive and support the pair’s upside. However, investors may still await actual progress during the next week’s trade meet in Beijing for confirmation.
The global risk sentiment gauge, 10-year US treasury yield, remains on a back foot to 2.046% by the press time.
At the monetary policy front, latest forward-looking employment indicators from Australia are likely to keep pushing the Reserve Bank of Australia (RBA) towards further rate cuts whereas the Bank of Japan (BOJ) will have to stay prepared for the upcoming tax hike in October.
As a result, today’s speech by the RBA Governor Phillip Lowe will be closely observed, in addition to trade/political news, for fresh guidelines.
Technical Analysis
A downside break of 50-DMA level, near 75.60, can further drag the quote towards month’s low near 75.10 ahead of targeting 75.00 during additional weakness. Meanwhile, 75.80 and 76.20 could keep checking the prices on the upside.
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