AUD/USD retreats from multi-day high to 0.6650 despite upbeat Aussie/China data

• AUD/USD bulls pause after refreshing fresh highs since March 09.
• China’s Industrial Profits dropped less than prior, Australia’s Construction Work Done also recovered.
• Looming US sanctions on China, likely protests in Hong Kong challenge the previous risk-on sentiment.
• Qualitative catalysts will gain major attention amid a light calendar.

AUD/USD pays little heed to better than forecast data while declining to 0.6645, down 0.08% on a day, amid the Asian session on Wednesday.

While Australia’s first quarter (Q1) Construction Work Done bounced of -3.0% prior and -1.5% forecasts to -1.0%, China’s Industrial Profits for April shrank 4.3% YoY versus the previous fall of 34.9%.

Markets’ previous optimism, backed by hopes of economic restart and virus cure, seems to have faded off-late. The reason could be cited from US President Donald Trump’s signals to levy fresh sanctions on China. Also stopping the risk-takers were concerns highlighted by Reuters suggesting a major protests brewing inside Hong Kong.

As a result, US 10-year Treasury yields pair their previous day’s run-up whereas stocks in Australia register mild losses by the press time.

Considering the lack of major data/events up for publishing during the rest of the Asian session, traders will keep eyes on the US-China tussle for fresh clues. It should also be noted that any updates concerning the Hong Kong protests will add downside pressure on the AUD/USD pair.

Technical analysis

Buyers remain cautious unless the pair registers a daily closing beyond 200-day SMA level around 0.6660, which in turn highlights the monthly support line, currently around 0.6460, for sellers.