AUD/JPY has been trading in a range bound between 77.40 and 79.85 over the past three months, hitting a six-week low of 77.53 on 25th March. Nevertheless, the bullish momentum has been increased thereafter and an uptrend line support has been formed during the past few weeks.
On 12th April, the bulls broke out the short-term major resistance level at 79.85 for the first time this year with a long bullish candle (the daily chart). The bulls continued to advance and broke the next key round number resistance at 80.00, hitting the highest level of 80.48 since December 2018. It appears that the range bound pattern has ended.
Some progress has been done recently for the trade war. U.S. Treasury Secretary Mnuchin addressed that U.S and China are “getting close to the final round of conclusion” last Saturday. He also said, “this is a very, very detailed agreement covering issues that have never been dealt with before.”
Although he talked with a cautious optimism attitude, the statement has boosted markets’ risk-on sentiment. As China is the largest export market to Australia, the progress of the trade talks should be positive to the Aussie dollar.
The Australian central bank RBA will release its meeting minutes on Tuesday, followed by the Australian labour market data on Thursday. It will likely affect the next movement of the Aussie.
By Devata Tseng
This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk.
Sources: Go Markets, MetaTrader4, Tradingview