AUD/JPY TALKING POINTS – TRADE WARS, EMPLOYMENT DATA, RBA
- AUD/JPY congesting between 79.055-78.691
- US-China trade relations keeping AUD/JPY tense
- Australian Dollar eyeing employment change data
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AUD/JPY has been cautiously trending higher since February 11, but uncertainty over US-China trade relations and cautious comments from the RBA has kept the pair below 79.055. This comes on top of the release of the RBA’s meeting minutes which revealed that the central bank “See[s] no strong case for near-term adjustment in policy’. Consequently, AUD/JPY dipped.
AUD/JPY – 15-Minute Chart
The RBA’s neutral – to arguably now more dovish – disposition is not difficult to understand. Economic news flow out of Australia has been underperforming relative to economists’ expectations since early December according to the Citi Economic Surprise Index. This comes as China – Australia’s biggest trading partner – slows down and shows increasingly vulnerability, particularly in the private sector.
Australian Dollar traders this week will likely be eyeing the upcoming employment data scheduled to be released on Thursday at 00:30 GMT. If data disappointments, it could tip the scales in favor of the RBA undertaking a more dovish-leaning approach to policy. In this outcome, AUD would likely fall alongside bond yields.
Leading up to the release of the data, AUD/JPY may cautiously move within spitting distance on either side of 78.691. If employment numbers disappoint, the pair might look to test a possible support at 78.217. If the numbers come in better-than-expected, the pair might flirt with 79.055. However, any substantial upward moves are not anticipated, considering the fundamental outlook appears to be working against the cycle-sensitive Aussie.
AUD/JPY – Four Hour Chart
AUD/JPY TRADING RESOURCES
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
