Source: PaxForex Premium Analytics Portal, Fundamental Insight

The Japanese Trade Balance for July was reported at ¥11.6B. Economists predicted a figure of -¥77.6B. Forex traders can compare this to the Japanese Trade Balance for June, reported at -¥269.3B. Exports for July decreased by 19.2% annualized and Imports decreased by 22.3% annualized. Economists predicted a decrease of 21.0 and 22.8%. Forex traders can compare this to Exports for June, which decreased by 26.2% annualized, and to Imports, which decreased by 14.4% annualized.

Japanese Machine Orders for June decreased by 7.6% monthly and by 22.5% annualized. Economists predicted an increase of 2.0% and a decrease of 17.6%. Forex traders can compare this to Japanese Machine Orders for May, which increased by 1.7% monthly, and which decreased 16.3% annualized. The Australian Westpac Leading Index for July increased by 0.01% monthly. Forex traders can compare this to the Australian Westpac Leading Index for June, which increased by 0.5%.

The forecast for the AUD/JPY turned bearish after price action stalled at a significant horizontal resistance area. Global Covid-19 cases continue to climb, causing new localized responses from New Zealand through Norway into the US. This currency pair remains above the Kijun-sen and the Tenkan-sen, but the Ichimoku Kinko Hyo Cloud flattened. Will the combination of economic malaise and technical bearishness force a sell-off into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.

Should price action for the AUD/JPY remain inside the or breakdown below the 76.200 to 76.850 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 76.500
• Take Profit Zone: 72.700 – 73.300
• Stop Loss Level: 77.200

Should price action for the AUD/JPY breakout above 76.850 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 77.200
• Take Profit Zone: 78.000 – 78.400
• Stop Loss Level: 76.850

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