AUD/USD Current price: 0.7203
- Easing trade war concerns, upbeat local data and rallying equities among the reasons for Aussie's rally.
- Australia September Retail Sales, seen growing 0.3% MoM.
The Aussie was the second-best performer against the greenback this Thursday, reaching a daily high of 0.7208 to settle around the 0.7200 figure. Broad dollar's weakness a continued rally in equities and solid data from Australia and China were among the reasons behind the rally. According to official releases, Australian trade balance surplus for September jumped to $3.017 billion in seasonally adjusted terms, the largest surplus in over a year-and-a-half. August surplus was revised to $2.342B from a previous estimate of $1.604B. Such surplus was a result of a 1.0% increase in exports to the highest on record, while imports fell 1.0%. Also, the Chinese Caixin Manufacturing PMI for October came in at 50.1, surpassing September 50.0 and much better than the contraction reading expected of 49.9. Trump´s optimistic tweet about trade talks developments with China, added to the bullish case of AUD/USD. Australia will release September Retail Sales, seen growing 0.3% MoM.
The bullish breakout after three weeks of consolidation favors continued gains ahead, although the rally stalled at a major static resistance, the 61.8% retracement of the September/October decline. Ahead of the Asian session and with the pair hovering around such Fibonacci retracement, the 4 hours chart shows that it has extended its advance above all of its moving averages, with the 20 SMA crossing above the 100 SMA in the 0.7100 price zone, while technical indicators entered overbought territory before losing upward strength, anyway holding near daily highs. Renewed buying interest beyond 0.7210 the pair has room to extend its advance up to 0.7250, a strong static resistance level. The bullish case will suffer only with a break below 0.7120.
Support levels: 0.7170 0.7120 0.7080
Resistance levels: 0.7210 0.7250 0.7290
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