AUD/USD analysis: stable around 0.7200, waiting for Chinese data

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7196

Chinese Retail Sales and Industrial Production seen moderating in October.
Australian dollar getting mixed clues from related markets.

The AUD/USD settled around the 0.7200 level, recovering most part of its weekly losses, backed by dollar's weakness at the beginning of the day, and by a better performance of equities in Europe and the US. Adding partially to Aussie's recovery, news indicated that the US and China are resuming trade talks, as the leaders of both economies have agreed to meet this weekend, within the G-20 meeting in Argentina. Also, Chinese vice-premier Liu He is expected to visit the US shortly to resume talks. Playing against the commodity-linked currency, crude oil prices collapsed to fresh multi-month lows, while Australian data released at the beginning of the day was quite discouraging as the NAB Business Confidence index for October was down to 4 from the previous 6, the lowest reading for this year, while the Business Conditions Index shrunk to 12 from 15 previously. The official report also showed that the biggest decline came from the employment measure, usually seen as an indicator of labor market strength.

Australia will release the Westpac Consumer Confidence index for November, previously at 1.0%, and Q3 Wage Price Index, seen 0.6% higher. China will release October Retail Sales, seen up 9.1% and Industrial Production, forecasted to have risen by 5.7%, both below September final readings.

The AUD/USD pair peaked for the day at 0.7223 but spent most of the day as it's ending it, struggling around 0.7200 and barely above the 38.2% retracement of its October/November advance. The 4 hours chart shows that a bearish 20 SMA capped the advance, while technical indicators lost upward strength within negative level and after correcting oversold readings, now trying to resume their decline. The 100 SMA in the mentioned chart crossed above the 200 SMA, somehow limiting chances of a steeper decline. The 50% retracement of the mentioned rally stands at 0.7160, the immediate support now while selling interest keeps limiting advances around 0.7220. The pair would need to extend its advance past 0.7250 to actually regain its bullish stance, while bears will take full control on a break below 0.7130, the 38.2% retracement of the mentioned decline.

Support levels: 0.7160 0.7130 0.7100

Resistance levels: 0.7220 0.7250 0.7290

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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