AUD/JPY: Rally dented on trade concerns, creates bearish outside-day candle

• AUD/JPY created a bearish outside-day candle on Thursday.
• Rally stalled as Trump upped the ante on trade war ahead of the G-7 summit.

The AUD/JPY created a bearish outside-day candle on Thursday, signaling the rally from the May 30 low of 81.03 could have run out of steam.

The Yen strength could be associated with fears the G7 meeting this weekend will dissolve into bitter fighting over trade. President Trump sowed seeds of discord last week by imposing tariffs on steel and aluminum imports from key trading partners like Canada, Mexico, and Europe.

Focus on China data

China trade data is expected to show the trade surplus narrowed to CNY 148.309 billion in May from 182.80 billion in April.

The Yen may pick up a strong bid, pushing the AUD/JPY lower if China reports a bigger trade surplus with the US. Meanwhile, trade war fears will likely recede and AUD/JPY could regain poise if China's trade surplus with the US falls sharply.

AUD/JPY Technical Levels

The resistance is seen at 83.84 (5-day moving average), 84.18 (June 5 high), and 84.54 (previous day's high). Meanwhile, support is lined up at 83.49 (100-day moving average), 83.10 (10-day moving average), and 82.73 (50-day moving average).