- AUD/JPY shows little reaction to July month China Trade Balance, Exports and Imports that crossed market consensus.
- Expectations of the US-China trade talks in September confront recent pessimism surrounding their relations.
Despite witnessing upbeat trade data from China, AUD/JPY remains modestly unchanged to 72.00 during early Thursday.
July month China Trade Balance beat $40.0 billion forecasts with $45.06 billion whereas Exports and Imports (YoY) also crossed -2.0% and -8.3% respective consensus numbers with+3.3% and -5.6% actual results. Further, the Trade Balance and Exports also rose past-expectations in Chinese Yuan (CNY) terms but imports flashed a weaker sign.
The US-China Trade tussle keeps busying investors during early-day after the US banned purchases from top-line Chinese companies for government departments whereas the People's Bank of China (PBOC) announced Yuan reference rate at 7.0039, the highest since 2008. Though, trade watchers are still optimistic for September month negotiations between the world’s top two economies.
Market’s risk-tone has been lighter off-late with global bond yield recovering from their multi-year lows. The US 10-year treasury yield flashes 1.74% numbers by the press time.
Looking forward, Japan’s Eco Watchers Survey results for July and trade/political headlines will be in the spotlight.
Technical Analysis
While short-term buyers are on the lookout of the near-term resistance-line break, at 72.20 now, June month low, 23.6% Fibonacci retracement of December 2018 to January 2019 downpour and 21-day exponential moving average (EMA) near 73.84/92 can limit the pair’s further upside. On the contrary, Tuesday’s low near 71.23 can offer immediate support, a break of which can fetch prices to 70.75/70 area comprising lows marked Wednesday and also in January.
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