AUD/USD struggles to register any meaningful recovery, up little above 0.7100 handle
| • Mixed Chinese data dump does little to provide any meaningful boost.
• Subdued USD demand/positive copper prices remains supportive.
• Gains remained capped amid concerns over US-China trade war.
The AUD/USD pair held on to its modest daily gains above the 0.7100 handle, albeit seemed struggling to build on the positive momentum.
After an initial dip to a one-week low level of 0.7089, the pair staged a goodish rebound and seemed rather unaffected by weaker than expected Chinese GDP growth figures, coming in at an annualized rate of 6.5% for Q3 2018.
Adding to this, Chinese industrial production also fell short of market expectations and recorded a 5.8% y/y growth in September. Meanwhile, a modest uptick in Chinese fixed asset investment (5.4% vs. 5.3% previous) and retail sales data (9.2% vs. 9.0 previous) provided a minor lift to the China-proxy Australian Dollar.
The uptick was further supported by a mildly positive tone around copper prices, which tend to underpin demand for the commodity-linked Australian Dollar and a subdued US Dollar price action, though lacked any strong follow-through amid persistent worries over escalating US-China trade tensions.
Moving ahead, today's relatively thin US economic docket, featuring the release of existing home sales data, seems unlikely to provide any meaningful impetus. Hence, traders are likely to take cues from Atlanta Fed President Raphael Bostic's scheduled speech in order to grab some short-term opportunities on the last trading day of the week.
Technical levels to watch
A follow-through up-move beyond the 0.7120-25 are might continue to confront some fresh supply near the 0.7145-50 supply zone and is followed by resistance near the 0.7175-80 region. On the flip side, sustained weakness below the 0.7100 handle is likely to accelerate the fall back towards the 0.7050-40 strong support before the pair eventually drops to test the key 0.70 psychological mark.
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