AUD/JPY presently trades around 79.00 during initial Asian hours of Monday. The pair is well beyond the Friday high and may challenge the 79.15 resistance as positive sentiments surrounding the US-Chain trade deal buoyed overall market risk profile. Monday reversed the early Friday pessimism that was mainly triggered after South China Morning post reported major differences between the world’s two largest economies on trade negotiations. Later on the day, the US and China concluded two-day discussions on a positive note. Adding to optimism was the US President Donald Trump’s signal to extend the 90-day deadline, March 01, if the talks are progressive. It should also be noted that Trump has already indicated willingness to wait for 60 days after March 01 to levy fresh tariffs on China if negotiations are going well. With the US policymakers’ pro-active approach towards having a trade-deal with China, commodity traders across the globe seemed relieved of the uncertainty for the world’s largest commodity buyer. On top of them was Australia as China is their largest trading partner and any news positive for the dragon economy boosts the Aussie traders’ morale as well. In addition to reflecting the positivity concerning China, Aussie is also a barometer portraying market risk-on. Traders usually favor the Australian Dollar (AUD) over the Japan Yen (JPY) in times of optimism to earn better returns. AUD/JPY Technical Analysis A two-week long symmetrical triangle formation confines the AUD/JPY moves between 79.15 and 78.10 with upward sloping 14-bar relative strength index favoring the pair’s advances to 79.60 on the break of 79.15. Meanwhile, the downside break of 78.10 may recall 77.50 and 77.00 as supports on the chart.
Original from: www.fxstreet.com