- AUD/JPY sinks heavily in early Asia following updates with regards to the US/Sino trade talks.
- The bears can aim for a continuation of the September downtrend and target 71 the figure.
AUD/JPY, which trades as a proxy to trade war headlines and risk-off themes in general, fell heavily in early Asia following the rather unsurprising updates with regards to the US/Sino trade talks getting underway this week in the US. The cross has fallen over 0.50% to a fresh low since the 3rd October business.
AUD/JPY is currently trading at 71.91 having been as low as 71.84 so far – The Chinese Yuan is down around 0.40% vs the USD.
The South China Morning Post says US and China make no progress on key trade issues
The moves in the currencies which are the most directly affected by the relationship between the US and China were hit hard when news that The South China Morning Post sources had said the following:
- US and China make no progress on key trade issues in two days of deputy-level talks, sources say.
- The Chinese delegation refuses to talk about forced technology transfers, a core US grievance in the negotiations, a person with knowledge of the meetings says.
- High-level talks are expected to last for only one day, with Liu He and his team now planning to leave Washington on Thursday.
This comes in stark contrast to some of the overnight reports that had stated the Chinese had remained open to a partial deal despite the US blacklist on Chinese tech firms. It also makes Trump's post-Wall Street close remark pretty foolish when he said there was a “really good chance” of a deal.
While below the descending 21-wek moving average and the 74 handle, the bears can aim for a continuation of the September downtrend and target 71 the figure and Sep lows while in pursuit of the July lows down at 69.95.