AUD/USD: Buyers await Australia/China data to validate recent recovery
|- The US-China tariff war remains in the spotlight.
- Australia and China data will also become important to observe.
AUD/USD is on the rounds near 0.6950 during the early Asian session on Wednesday. The pair recently recovered after statements from the US President signaled that the US-China tariff-war tensions might abate soon. However, traders await details of Australia’s wage growth, China’s retail sales and industrial for near-term direction.
Tweets from the US President Donald Trump like “Relationship with China's Xi is extraordinary” and “China wants a deal!” helped risk sentiment on Tuesday.
It should also be noted that the US Treasury Secretary will soon travel to China for further trade talks after the absence of positive outcome from the latest discussion at Washington activated fresh pessimism across the major markets.
China is Australia’s largest customer and hence any positive news for the world’s second-largest economy plays well for the Australian Dollar (AUD) as well.
Global barometer of risk sentiment, the US 10-year treasury yields, rose grew 2 basis points to 2.42% by the end of Tuesday.
Investors may now turn towards the economic calendar that carries first-quarter wage price index numbers from Australia and April month retail sales and industrial production from China.
As per the market consensus, Australia’s Q1 2019 wage price index may rise to 0.6% from 0.5% on a quarterly basis but can remain unchanged at 2.3% on the YoY format. On the other hand, China’s details might not please Aussie buyers as expectations suggest an 8.6% figure of retail sales growth against 8.7% prior and 6.5% industrial production growth versus 8.5% earlier.
Apart from the aforementioned details, the US retail sales from April will also entertain the traders. The retail sales growth is expected to soften to 0.2% from 1.6% MoM and retail sales ex-autos could clock in 0.7% from 1.2% prior. Additionally, the growth of retail sales control group might decline to 0.4% from 1.0%.
Technical Analysis
0.6900 and January 2016 lows near 0.6830 can keep flashing on the bear’s radar unless the pair manages to cross 0.7000 round-figure. Also, 0.6960/65 can act as immediate resistance for the prices.
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