AUD/USD finds resistance near 0.72 as DXY struggles to push higher
|- US Dollar Index stays comatose above 96.
- Improved sentiment helps the AUD gather strength.
After rising sharply in the late NA session on Thursday amid optimistic headlines surrounding the U.S. - China trade conflict, the AUD/USD pair struggled to extend its rally above the 0.72 handle and moved into the negative territory before recovering its daily losses. As of writing, the pair was flat on the day at 0.7192.
The Wall Street Journal on Thursday reported that the U.S. officials were weighing the option of lifting tariffs on Chinese imports to calm the markets and give China a reason for further concessions in trade negotiations. Although these claims were quickly denied by the U.S. Treasury, markets remain hopeful that the trade conflict could come to an end.
Later in the day, industrial production, capacity utilization and consumer confidence data from the U.S. will be looked upon for fresh impetus. Ahead of the data, the US Dollar Index stays in its extremely tight 2-day old trading range above the 96 mark.
On the other hand, when investors return at the Asia opening on Monday, fourth quarter GDP data from China will be watched closely. Previewing the data, "the consensus estimate of 6.4% year-on-year GDP growth is barely a slowdown from 6.5% in the previous quarter despite all the hue and cry that weighed down global markets in the last quarter. However, a sharp deceleration in manufacturing and retail sales as well as in trade growth, and falling industrial profits signal a downside risk to the consensus GDP estimate. Our house forecast is 6.3%,” ING analysts said in a recently published report.
- China Q4 2018 GDP Preview: Major Banks expectations.
Technical levels to consider
With a weekly close above 0.7200 (psychological level), the pair could target 0.7235 (Jan. 11 high) on the upside ahead of 0.7265 (Dec. 6, 2018, high). Supports, on the other hand, are located at 0.7170 (50-DMA), 0.7120 (20-DMA) and 0.7035 (Dec. 21, 2018, low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.