AUD/USD: Bulls target 0.7230 on upbeat China data
- China data propelled the quote to an eight-week high.
- The US trade balance might further help the buyers to challenge 0.7230 resistance.
The AUD/USD pair is taking rounds near 0.7200 mark during early Wednesday. The Aussie pair rallied to the highest in eight weeks after headline economic data from China printed upbeat figures. The US trade balance and developments concerning the risk-events are some of the catalysts to be watched for immediate direction.
The Australian Dollar (AUD) surged to February 21 tops versus the US Dollar (USD) after China’s gross domestic product (GDP), retail sales and industrial production pleased Aussie buyers.
First quarter (Q1) 2019 GDP grew more than 6.3% forecast to 6.4% on a YoY basis while matching the market consensus of 1.4% on a quarterly basis. Retail sales rose past 8.4% expected to 8.7% whereas industrial production stole the limelight with a 8.5% increase against 5.9% forecast and 5.3% prior.
China is Australia’s largest customer, any positive can boost the Aussie as well. Additionally, China is the world’s second largest economy and the biggest industrial player which in turn highlights the importance of Chinese data to market risk sentiment.
Yields on the US 10-year Treasury rose to 2.605%, the highest level since March 20, recently after the China data boost market risk-taking capacity.
Looking forward, developments surrounding the US-China trade talks and the US trade balance figure for February can be of immediate concern for the Aussie players. The US trade balance may further escalate the AUD/USD pair’s upside if matching the forecast of $-53.7 billion deficit versus the previous $-51.1 billion figure.
AUD/USD Technical Analysis
While February 21 becomes immediate resistance around 0.7200 for the buyers to conquer, an upward sloping trend-line stretched since March 01, at 0.7230, can be on the Bulls target afterward. If at all the pair rallies beyond 0.7230, January 31 high near 0.7300 could lure the optimists.
On the downside, 0.7140 comprising 100-day SMA and 61.8% Fibonacci retracement of its December 2018 to January 2019 decline could limit the pair’s immediate south-run. Given the prices slid under 0.7140, 50-day SMA level of 0.7105 and to the ascending trend-line stretched since early-March around 0.7080 could gain the Bears’ attention.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
