AUD/JPY drops below 76.00 on downbeat Aussie trade numbers, RBA in focus

AUD/JPY extends losses from the highest in two weeks to revisit the sub-76.00 area.
Australia’s Trade Balance drops to 2,643M in August versus 5,154M forecast.
Market optimism pauses amid concerns over US President’s health even as he left Walter Reed after COVID-19 treatment.

Anil Panchal FXStreet

AUD/JPY drops to the intraday low of 75.86, currently around 75.92, during the initial hour of Tokyo open on Tuesday. The pair recently reacted to a downbeat August month trade numbers for Australia while paying a little heed to the ANZ Job Advertisements for September.

Australia’s headline Trade Balance slipped from 4,294M in July to 2,643M in August. Details suggest that the Exports shrank more than -3.4% prior to -4.2% whereas Imports also weakened from 6.2% to 2.0%. On the contrary, the Australia and New Zealand Banking Group’s (ANZ) Job indicator for September rose past-1.6% previous readouts to +7.8%.

Other than the data, the pair also dropped as the latest video of US President Donald Trump pushed market players to doubt his breathing capacity despite leaving the hospital earlier in the day. The Republican leader said to feel “20 years younger” after the latest coronavirus (COVID-19) treatment.

Against this backdrop, Japan’s Nikkei 225 rises 0.20% whereas Australia’s ASX 200 drops over 0.30% by the time of the press. Further, the S&P 500 Futures marks 0.14% loss after probing the mid-September highs the previous day.

Moving on, market players are waiting for the monetary policy meeting of the Reserve Bank of Australia (RBA), up for conveying outcome at 03:30 GMT, followed by the Aussie budget release of 08:30 GMT.

While the RBA is expected to stand pat on its current monetary policy, the tone in the rate statement will be the key. Further, the Australian government is expected to announce tax cuts after unveiling details of infrastructure spending the previous day.

It’s worth mentioning that the risk catalysts, mainly relating to US President Trump’s health, will be the key to determine near-term market moves.

Technical analysis

Unless breaking a confluence including 50-day SMA, a five-week-old falling trend line and a 38.2% Fibonacci retracement level of June-August upside, near 76.20/25, AUD/JPY buyers are likely to remain troubled.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD breaks below 1.1800, two-week lows

EUR/USD’s selling pressure is gathering pace now, breaching below the key 1.1800 yardstick to hit new two-week troughs on Wednesday. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and ahead of the publication of the FOMC Minutes.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.