AUD/JPY confronts 100-day SMA as trade optimism returns

  • AUD/JPY bounces off four-week low amid risk reset.
  • US-China getting closer to the phase one trade deal, the US meddling in Hong Kong questions the optimists.
  • Speech from RBA’s Debelle, Japan’s Industrial Production and trade/political headlines will be observed for fresh clues.

With the latest media releases portraying progress in the US-China trade deal, not to forget optimism conveyed from the US-side, AUD/JPY recovers from a monthly low to 73.65 by the press time of Asian session on Friday.

In addition to the early-day anticipation of the US likely extending waivers to do business with Huawei, upbeat comments from the White House Economic Adviser Larry Kudlow and trade positive tweet from the Fox reporter also help improve market’s risk tone off-late. The White House Adviser recently said that the two sides are “getting close” to the trade deal whereas Fox’s Edward Lawrance cited anonymous Chinese source to confirm upbeat sentiment at the negotiators’ desk ahead of today’s talks. Also brightening the mood were comments from the US Department of Agriculture (USDA) Secretary McKenny who assigned a 50% chance of a successful trade deal.

On the contrary, the US expedition of a bill to support Hong Kong protesters, by way of renewing special trading status, as said by Bloomberg, exerts downside pressure on the risk sentiment as China is strongly against any such moves.

As a result, the US 10-year treasury yields gain nearly two basis points (bps) to 1.83% while S&P 500 Futures stays modestly positive around 3,097 by the press time.

While comments from the Reserve Bank of Australia’s (RBA) Deputy Governor Guy Debelle and Japan’s September month Industrial Production numbers, expected to remain unchaged at 1.1% YoY and 1.4% MoM, occupy immediate watch-list, trade/political headlines will keep the driver’s seat.

Technical Analysis

Unless breaking an ascending trend line since August 26, at 73.30, prices are less likely to revisit October low surrounding 71.70. On the contrary, the pair’s sustained rise above 100-day Simple Moving Average (SMA) level of 73.70 can recall month-start levels around 74.30/35.

additional important levels

Today last price 73.63
Today Daily Change 4 pips
Today Daily Change % 0.05%
Today daily open 73.59
Daily SMA20 74.6
Daily SMA50 73.75
Daily SMA100 73.7
Daily SMA200 75.68
Previous Daily High 74.44
Previous Daily Low 73.35
Previous Weekly High 75.68
Previous Weekly Low 74.56
Previous Monthly High 75.3
Previous Monthly Low 71.73
Daily Fibonacci 38.2% 73.77
Daily Fibonacci 61.8% 74.02
Daily Pivot Point S1 73.15
Daily Pivot Point S2 72.71
Daily Pivot Point S3 72.06
Daily Pivot Point R1 74.23
Daily Pivot Point R2 74.88
Daily Pivot Point R3 75.32



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