AUD/JPY clings to 74.35 after RBA’s Kent’s speech, trade/Brexit exert downside pressure
- AUD/JPY shrugs of RBA’s Kent’s speech as it offers a little clear price direction.
- Trade/Brexit optimism fades amid recent challenges.
- China’s reaction to the US allegations, UK PM’s action after the EU decision will be the key.
Comments from the RBA’s Kent fails to provide any clear direction to the AUD/JPY pair amid downbeat market sentiment as the pair seesaws around 74.35 amid initial Asian session on Wednesday.
While participating in a panel discussion at the International Swaps and Derivatives Association, the Reserve Reserve Bank of Australia’s (RBA) Assistant Governor (Financial Markets) Christopher Kent said that end of LIBOR (London Interbank Offered Rate) is not a risk, fact people not ready for it is the risk. RBA’s Kent further mentioned that in Australia, few signs of people making progress on the transition from LIBOR prevails.
Given the comments showing the little direction to the Australian Dollar (AUD) traders, the pair remains on the back foot after the release.
Market sentiment has recently worsened amid the trade negative headlines from the US and uncertainty surrounding the Brexit. As a result, the US 10-year Treasury yields scaled back the early Tuesday upside to 1.77% while Wall Street also marked sluggish closing.
As the economic calendar is mostly empty during today’s Asian session, trade/Brexit headlines will keep dominating market sentiment. Among them, China’s reaction to the recent blame from the US, concerning aluminium wires and cables, and the United Kingdom’s (UK) Prime Minister’s (PM) action after the mostly certain three-month Brexit extension from the European Union (EU) will be closely observed to further stretch the latest risk aversion wave.
Technical Analysis
Pair’s failure to hold to recovery gains beyond September high of 74.50 makes it an immediate resistance as a sustained run-up above the same could propel prices to 200-day Exponential Moving Average (EMA) level of 75.63. Alternatively, a 100-day EMA level of 74.00 and September 01 high close to 73.10 offer immediate supports to watch during pair’s further declines.