AUD/JPY rallies to weekly top, bulls await sustained strength above 97.00 mark

AUD/JPY catches aggressive bids in reaction to dovish remarks by BoJ’s Uchida.
A positive risk tone further undermines the safe-haven JPY and lends support.
The RBA’s hawkish stance and the upbeat Chinese import data act as a tailwind.

Haresh Menghani FXStreet

The AUD/JPY cross builds on this week's goodish recovery move from the vicinity of the 90.00 psychological mark, or its lowest level since May 2023 and gains positive traction for the second straight day on Wednesday. The strong intraday momentum lifts spot prices to a fresh weekly peak, around the 97.00 round figure during the Asian session and is sponsored by a combination of factors.

The Japanese Yen (JPY) comes under intense selling pressure in reaction to dovish remarks from Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, saying that the central bank won't hike rates when markets are unstable. This comes on top of signs of stability in the global financial markets, which is seen as another factor undermining demand for the safe-haven JPY and lending some support to the AUD/JPY cross.

The Australian Dollar (AUD), on the other hand, continues to draw support from the Reserve Bank of Australia's (RBA) hawkish outlook on Tuesday, indicating that it will keep policy restrictive in the wake of still sticky inflation. Meanwhile, Chinese trade data released this Wednesday showed an unexpected surge in imports, by the 7.2% YoY rate in July, which suggested that domestic demand remains resilient.

Investors, however, remain worried about signs of cooling economic growth in China – the world's second-largest economy. Apart from this, geopolitical risks stemming from the ongoing conflicts in the Middle East should keep a lid on the market optimism. This, in turn, could offer some support to the JPY and cap gains for the AUD/JPY cross, warranting some caution before positioning for any further appreciating move.

Economic Indicator

Trade Balance CNY

The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Breaking: US and Israel attack Iran, risk aversion to sweep global markets

Early Saturday, United States (US) President Donald Trump announced that the US had begun “major combat operations” in Iran, following Israel’s pre-emptive missile attacks against Tehran.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.