AUD/JPY turns positive, snaps two-day losing streak

AUD/JPY clocked a low of 86.48 earlier today before turning positive to trade around 86.80 levels. The move higher has put an end to the two-day losing streak.

Offered tone around Yen gathered pace

The offered tone around the Japanese Yen gathered pace after the data released in Japan showed a sharp rise in the imports led to a jump in the trade deficit in January. Exports increased at an annualised 1.3% in January and imports rose 8.5%. Markets were expecting imports to print at 4.7%. The Japanese total trade deficit rose to JPY 1,086.9 billion in January.

The sharp rise in imports was largely due to an annualised rise in energy import costs. Oil prices have rallied from $30 to $52 levels over the last 12 months.

AUD/JPY Technical Levels

A break above 86.80 (Feb 14 low) would open doors for an extension of the rally to 87.21 (5-DMA) and 87.46 (previous day’s high). On the other hand, a breakdown of support at 86.74 (10-DMA) could yield a pullback to 86.48 (session low) under which the losses could be extended to 86.30 (previous day’s low).