AUD/USD Review: reverses Chinese data-led dip, turns higher for the third consecutive session
| • Dismal Chinese macro data prompts some weakness at the start of a new trading week.
• A follow-through USD weakness helps limit losses and recover early lost ground.
• Subdued commodity prices might now keep a lid on any meaningful up-move.
The AUD/USD pair reversed an early dip to an intraday low level of 0.7409 and turned higher for the third consecutive session.
Today's dismal Chinese macro data, showing that the second-quarter GDP growth slowed to 6.7% and industrial production fell to 6% y/y in May, triggered some initial weakness around the China-proxy Australian Dollar.
However, a mildly weaker tone surrounding the US Dollar prompted some dip buying and helped the pair to build on last week's goodish rebound from a one-week low level of 0.7360.
Further gains, however, are likely to remain limited amid subdued action around commodity space, especially copper, which tends to undermine demand for commodity-linked currencies - like the Aussie.
Moving ahead, today's US economic docket, highlighting the release of the US monthly retail sales data and Empire State Manufacturing Index, will now be looked upon for some fresh impetus ahead of the RBA monetary policy meeting minutes, due for release during the early Asian session on Tuesday.
Technical Analysis
The pair found decent support near an important confluence region, comprising of 100-hour SMA and 38.2% Fibonacci retracement level of the 0.7484-0.7360 slide witnessed last week.
With technical indicators on the said chart holding in positive territory, a follow-through buying beyond 61.8% Fibonacci retracement level now seems to pave the way for an extension of the positive momentum.
Spot rate: 0.7431
Daily High: 0.7440
Daily Low: 0.7409
Trend: Bullish
Support
S1: 0.7411 (100-period SMA H1)
S2: 0.7386 (S1 daily pivot-point)
S3: 0.7360 (last Thursday's swing low)
Resistance
R1: 0.7444 (R1 daily pivot-point)
R2: 0.7489 (50-day SMA)
R3: 0.7500 (psychological round figure mark)
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