AUD/JPY bounces off 76.00 on upbeat Aussie Retail Sales

• AUD/JPY repeats recovery moves from 76.05/06 following its U-turn from 76.27.
• Australia’s July month Retail Sales grew 3.3% versus 2.7%.
• Market sentiment recovers as new cases in Victoria drop to five-week low, US-China trade talks likely to resume.
• Upbeat economics join anticipated easing in virus-led restrictions from Japan to strengthen the risk-on mood.

AUD/JPY picks up bids from 76.06 to currently around 76.12 during the early Friday. the pair recently benefited from Australia’s July month Retail Sales. Even so, the comparative strength of the Japanese yen, on upbeat fundamentals, weigh on the currency pair.

The preliminary readings of Australia’s July month Retail Sales suggest an upbeat scenario with 3.3% MoM gains. Though, details from the Australian Bureau of Statistics (ABS) mention that retail turnover rose in all states and territories except Victoria in July.

Read: Aussie Retail Sales (Pre): Rise in all territories except Victoria by 3.3% for July

Earlier during the day, Australia’s Commonwealth Bank Manufacturing PMI for August eased to 53.9 from 54.0 prior. On the other hand, Japan’s Jibun Bank Manufacturing PMI rose past-45.2 to 46.6 for the said period. Further, the National Consumer Price Index from Japan also recovered from 0.1% to 0.3% YoY in July.

Talking about the risk, Victoria’s coronavirus (COVID-19) new cases dropped 179, the lowest in five weeks, on Thursday whereas figures from Tokyo surged past-300, to 339 for the first time since Saturday in Tokyo. It’s worth mentioning that the Japanese government is planning to ease entry barriers for foreign residents while Australian authorities still struggling to tame the pandemic.

On a separate page, Chinese authorities suggest Sino-American trade talks to resume soon while their US counterparts said they’re “in touch”. Additionally, chatters suggesting the US push for Iran’s arms embargo and American House Speaker Nancy Pelosi’s U-turn from readiness to take a smaller relief amount to criticize the same troubles the risk-tone sentiment.

Against this backdrop, S&P 500 Futures gain 0.35% while stocks in Japan and Australia also mark mild profits by the press time. Further, the US 10-year Treasury yields remain firm near 0.65% as we write.

Moving on, a lack of major data/events may direct the pair traders towards risk catalysts comprising virus headlines, trade war news and stimulus updates for fresh impetus.

Technical analysis

Unless breaking 200-bar SMA and an ascending trend line from July 10, respectively near 75.70 and 75.55, buyers will not stop aiming for 76.20. Though, the quote’s additional upside may dwindle unless breaking a falling trend line from July 22, currently around 76.65.