AUD/JPY recovers from multi-month low after Aussie trade balance, RBA in the spotlight

• Australia’s June month trade balance figures flash upbeat marks.
• The US-China trade spat, North Korea’s missile test favor market’s run to risk-safety.
• RBA’s monetary policy meeting will be the key for now.

AUD/JPY extends its recovery to 72.12 after Australia’s trade balance data, published during the Asian session on Tuesday.

Australia’s June month Trade Balance rose past 6,000M forecast to 8,036M whereas Exports and Imports slipped to 1.0% and -4.0% respectively from 4.0% and 1.0%.

North Korea’s fourth round of missile test and the US Treasury Department’s official statement terming China as a currency manipulator dragged the quote earlier down to fresh seven month low.

Adding to the woes was Chinese media and the Foreign Ministry comments that reacted to the US action.

Investors are now all gearing up for the monetary policy meeting by the Reserve Bank of Australia (RBA). Even if the Aussie central-bank isn’t expected to alter present monetary policy, its forward guidance will be closely watched for fresh impulse.

Technical Analysis

Considering the pair’s recent U-turn, backed by oversold levels of 14-day relative strength index (RSI), prices are likely moving up towards Friday’s low of 72.20 ahead of targeting 73.00 and June month low near 73.92. Alternatively, pair’s extended declines can have January month low surrounding 70.71 as a rest prior to targeting 70.00 round-figure.