AUD/USD analysis: to retest yearly lows on poor Chinese data

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7105

Chinese GDP, Industrial Production, and Retail Sales will set the tone for Aussie.
Aussie at weekly lows dragged lower by worldwide equities rout.

The AUD/USD pair traded within familiar levels for most of the day, falling, however, to a fresh weekly low of 0.7096 by the end of the US session, as risk aversion took over the market, sending worldwide equities into the red. The pair seesawed between gains and losses following a mixed Australian employment report, which showed that, in September, the economy added a total of 5.6K new jobs, missing the market's expectations of 15.0K. However, full-time employment was up by 20.3K, with a decline in part-time jobs bringing the total count down. The unemployment rate fell to the lowest since April 2012, printing 5.0% vs. the previous 5.3%, with the participation rate down to 65.4% from 65.7%. The numbers may have not been enough to boost the Aussie, but for sure are comfortable levels for the RBA, as with the unemployment at 5.0%, policymakers would expected rising wages and inflationary pressures.

Australia has no data scheduled for this Friday, but China will release Q3 GDP figures, with the economy expected to have grown 1.6% in the three months to September, and the YoY reading foreseen at 6.6%. China will also release September Retail Sales and Industrial Production data. Worse-than-expected figures will favor an AUD/USD approach to yearly lows at 0.7040.

Technically, the short-term picture supports such decline, as in the 4 hours chart, the pair trades back below the 20 and 100 SMA, while technical indicators re-entered negative territory and stand at fresh daily lows. Furthermore, the pair has broken below the 38.2% retracement of the latest daily slump after flirting with the 61.8% retracement of the same decline late Wednesday. The next Fibonacci support comes at 0.7085, the only obstacle ahead of the yearly low.

Support levels: 0.7085 0.7040 0.7000

Resistance levels: 0.7120 0.7160 0.7200

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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