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AUD/JPY rises 40+ pips on upbeat Aussie employment data

  • AUD/JPY reversed early-day losses to flash intra-day high after Aussie employment numbers offered positive surprise.
  • The pair earlier ignored second-tier data from Japan and Australia, the market’s risk aversion has been playing a key role off-late.
  • Few more of the Japanese numbers and qualitative headlines concerning trade, China virus will be in focus for now.

AUD/JPY pops to 75.45 after Australia’s December month employment data pleased Aussie bulls on early Thursday. The pair was declining earlier amid risk aversion and showed a little reaction to the second-tier data from Japan and Australia.

Australia’s December month Employment Change rose beyond 15K forecast to 28.9K while Unemployment Rate slipped below 5.2% expected and prior to 5.1%.

Read more: Australia Jobs Data: Unemployment Rate: 5.1% vs 5.2% expected (AUD bullish)

Earlier during the day, Japan’s Merchandise Trade Balance for December slipped below ¥-150 B to ¥-152.5 B. Additional details suggested that the Imports and Exports during the same month dropped more than -3.4% and -4.2% respective forecasts to -4.9% and -6.3% YoY in that order. On the other hand, Australia’s Consumer Inflation Expectations for January rose well beyond 3.8% market consensus and 4.0% prior to 4.7%.

Given the AUD/JPY pair’s consideration as the market’s risk barometer, the quote’s recent declines could be attributed to the tensed situations in China due to the outbreak of coronavirus as well as the likely EU-US trade war. Chinese authorities are recently praised by the World Health Organization (WHO) to dump the Lunar New Year preparations and work aggressively to investigate/tame the humanly transmitted virus that so far killed nine people.

US President Donald Trump’s visit to the World Economic Forum (WEF) in Davos spread worries for the European Union (EU) as the leader showed readiness to levy the EU cars if failing to get any trade deal from the region. In this regard, the EU Chief Von Der Leyen may visit Washington in early February, as per the EU Head Of Delegation’s latest update.

In addition to what is already mentioned, US President Trump’s impeachment hearings, uncertainty surrounding the US-China trade future and the geopolitical noises in the Middle East also contribute to the market’s risk aversion. The same gets highlighted in the US 10-year treasury yields declines to 1.76% and the sluggish print of S&P 500 Futures, at 3,315 now.

Investors will now have Japan’s All Industry Activity Index and Leading Economic Index numbers for November to watch on the economic calendar. Though, the importance of trade/political headlines will not be tamed at any time.

Technical Analysis

50-day SMA near 75.00 offers the immediate support ahead of 200-day SMA near 74.67, a break of which can drag the quote to an upward sloping trend line from early September, at 74.07 now. On the upside, buyers will wait for a clear break above 75.60 for fresh entry.

 

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