AUD/JPY eases from 21-month top after Aussie trade balance, US politics in focus

  • AUD/JPY drops after Australia’s November trade numbers disappoint AUD bulls.
  • Risks rise following the drama on Capitol Hill, Democrats are set to rule the US Senate.
  • Virus woes gain momentum, ire against China seems mostly ignored.
  • Japanese PM Suga’s speech, risk catalysts will be the key amid a light calendar ahead of the US session.

AUD/JPY steps back from the multi-month high, with mild losses, after Aussie trade numbers during Thursday’s Asian trading. While downbeat trade data weighed on the quote, risk-on mood restricts the immediate declines of the quote.

Australia’s November month Trade Balance dropped below 6,200M forecast and 7,456M previous readouts to 5,022M. Further details suggest Exports and Imports flashed mixed results with the former easing from 5.4% to 3.0% while the latter jumps from 0.6% prior to 10.0% MoM. Additionally, Aussie Building Permits for November were also out and matched market forecasts of 2.5% MoM gains while flashing 2.6% figures versus 3.8% prior.

Talking about risks, US policymakers return to the Capitol Hill building after a mob of President Donald Trump roiled the premises a few hours ago. Angry Senate members are likely to ease their reluctance in accepting the Democratic victory as the Congress members are up for Electoral College votes. Also favoring the odds of Joe Biden and Company’s arrival into the White House is the likely tie-breaking vote of Kamala Harris.

Elsewhere, global coronavirus (COVID-19) woes firm-up, mainly in the UK, the US and Japan, which in turn pushes Japanese Prime Minister (PM) Yoshihide Suga towards announcing emergency in Tokyo and three surrounding areas. It should be noted that China’s reluctance to cooperate in the covid tracing investigation and Hong Kong activists’ detention joins the US ire over Beijing to challenge the risk-on mood. However, nothing gains major attention than political play in America.

That said, S&P 500 Futures rise over 0.20% while Japan’s Nikkei 225 and Australia’s ASX 200 are up over 1.0% by press time.

Moving on, AUD/JPY traders will keep their eyes on the US Congress activities while waiting for Japanese PM Suga’s speech for fresh impulse.

Technical analysis

Only if the quote drops back below 78.80, comprising an area including December 17 top and Monday’s low, AUD/JPY is less likely to avoid targeting April 2019 top near 80.72 and the 81.00 threshold.