AUD/JPY clocks two-week highs on strong China data

Big beat on the China trade balance, exports and imports number boosted the demand for the Aussie dollar, a proxy for China, thus pushing the AUD/JPY cross to a two-week high of 87.00 levels.

The pair clocked a high of 86.99 and was last seen trading around 86.95 levels.

The sharp rise in Chinese exports and imports is not only good news for Australia and AUD, but also for the risk assets in general. Europe, especially Germany, whose 10% of the total exports are to China, needs strong Chinese imports.

A 25.5% spike in imports in CNY terms could be cheered by the European and US equity index. Thus, the offered tone around the safe haven Yen could strengthen further. That would add to the bullish move in the AUD/JPY cross.

AUD/JPY Technical Levels

A break below 86.73 (Feb 3 low) would open doors for 86.23 (session low), under which the psychological level of 86.00 (5-DMA + 10-DMA) could be put to test. On the higher side, Jan 27 high of 87.09 could offer resistance, which, if breached could yield a re-test of 87.53 (Dec 15 high). The next hurdle is seen at 88.00 levels (zero figure).