Weak Chinese export growth in December seems to have taken a wind out of the Aussie bulls.
The AUD/JPY cross clocked an intraday high of 86.28 ahead of the data release and was last seen trading around 86.10 levels.
Trade situation continues to face difficulty - China Customs
Exports in CNY terms dropped 2% y/y, compared to the expected drop of 3.5%. The slide in exports is not a real issue, given the anaemic global demand.
The real cause of concern is 0.6% y/y growth in imports, which was well short of the expected figure of 2.7%. The poor performance of imports represents weak domestic demand and suggests the rebalancing process is still far from done.
AUD/JPY Technical Levels
A break above 86.61 (Dec 12 high) would expose resistance at 87.00 (zero figure), above which the cross may test supply at 87.53 (Dec 15 high). On the other hand, a failure to hold above 86.00 (zero levels) would open the doors to 85.70 (5-DMA) and then to 85.29 (10-DMA).
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