AUD/USD clings to 2-week bottom ahead of China data
|- Traders await data from the key customer to validate RBA’s rate cut fears.
- Souring US relations with China and Iran also questions trade sentiment.
Having witnessed another day of losses piled due to heightened expectations of the RBA’s rate cut, the AUD/USD pair shows little moves near 0.6920 as investors await China data during the early Asian session on Friday.
The Reserve Bank of Australia’s (RBA) increased emphasis on the unemployment rate triggered fears of another rate cut by the Aussie central bank after the job data rose more than expected 5.1% to 5.2% during May.
Bears also gave due importance to the US-China trade stalemate while heavy risk tone due to rising concerns of a Fed rate cut and political tension between the US and Iran also weighed on the prices.
The global barometer of risk sentiment is the US 10-year treasury yield that slipped more than three basis points (bps) to 2.093% by the time of writing.
China’s May month retail sales and industrial production are next in the pipeline for Aussie traders to watch. Recent data from the dragon nation have been upbeat but could do little to boost the Antipodeans. However, a likely increase in retail sales to 8.1% from 7.2% coupled with a rise in industrial production growth to 5.5% from 5.4% on a yearly basis might not refrain from pleasing the traders. On the contrary, disappointment from the data dump is likely to cause more losses than otherwise due to prevailing pessimism.
Technical Analysis
The quote is nearing the late-March bottoms around 0.6900, a break of which opens the door for its further south-run to 0.6860 and then to 2016 low near 0.6830.
In a case where prices take a U-turn, 0.6940, 0.6960 and 50-day simple moving average around 0.7010 could challenge the pullback.
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