AUD/JPY: 79.35/40 continues to challenge buyers

• Trade positive news and BoJ’s sustained support for loose monetary policy please AUD/JPY buyers.
• A successful break above 79.40 becomes pre-requisite to aim for 80.00.

The Australian Dollar (AUD) is on the bids near 79.40 versus the Japanese Yen (JPY) during early Thursday. The AD/JPY pair strengthened Wednesday as global risk sentiments improved. Though, 79.35/40 area comprising 100-day SMA continues to limit the pair’s immediate upside. Traders may now focus on the trade discussions between the US and China for fresh impulse.

Global risk sentiments improved yesterday as news reports from the US-China trade negotiation brightened chances of the much-awaited trade deal between the world’s two largest economies. Apart from risk-on, the Australian Dollar (AUD) gained additionally from the news as China is the largest consumer of Australia.

At the start of trading in Tokyo, Bank of Japan (BoJ) Governor Haruhiko Kuroda appeared in the Japanese parliament, namely the National Diet of Japan. The central bank governor reiterated his support for monetary policy easing while also saying that it will take some time for inflation to reach BOJ’s 2.0% target.

10-year treasury yields for the US government bonds are in the positive territory for the last two days and mark 2.517% at the press time.

While sustained support for easy monetary policy has been positive for the AUD/JPY pair, the absence of any data and updates from the trade negotiations at Washington also pleased buyers.

Looking forward, further details on the discussions will be closely observed amid the lack of statistics in order to clear an important upside barrier.

AUD/JPY Technical Analysis

Despite multiple attempts, the quote has been under 79.35/40 resistance-area since early March. As a result, successful trading beyond the same could accelerate the pair’s recovery towards 80.00 with 79.70 being an intermediate halt. Additionally, 200-day SMA level of 80.40 can challenge bulls past-80.00.

50-day SMA level of 78.80 and an upward sloping trend-line since March 25 at 78.60 can act as immediate supports for traders to observe. However, break of 78.60 can drag prices to 77.50 and 77.00 rest-points.