AUD/USD coiling beneath 0.7300, but risks are mounting

The Aussie is climbing into the 0.7300 handle on a weak-kneed USD.
AUD-relevant data has been pointing in the wrong direction lately, and a broad-market correction on the Aussie could be in the works if China Trade Balance numbers pull the rug out from underneath AUD bidders.

Joshua Gibson FXStreet

The AUD/USD is finding itself splashing around near 0.7275 after a run at the 0.7300 level on Wednesday following a decline in the US Dollar following US mid-term elections.

Australian data has been on the disappointing side as of late, with Australia's AiG Performance of Construction Index for October sinking to 46.4, a sharp decline from September's reading of 49.3. Precious metals, especially Gold, will likely help erode the AUD's base in the future after the soft yellow metal declined from the $1,230.00 handle yesterday, but for now a softening Greenback following US elections, where President Donald Trump's ruling Republican party failed to hold onto the US House of Representatives, will be bolstering riskier assets across the board.

Thursday sees a chance for broader markets to reset the board with Chinese Trade Balance figures dropping early in the session, expected sometime around 03:00 GMT, Median market forecasts expect China to post a trade surplus of $35 billion, with growth in Exports and Imports of 14% and 11% respectively.

AUD/USD levels to watch

The Aussie is primed for a continued push up the charts as bulls look to gather strength, and according to FXStreet's own Valeria Bednarik: "from a technical point of view, the AUD/USD pair is poised to extend its advance, as it's currently developing well above all of its moving averages, with the 20 SMA maintaining a strong bullish slope after crossing above the larger ones. Furthermore, the pair is far above the 61.8% retracement of its September/October decline at 0.7200, and the strong static support at 0.7250. Technical indicators in the mentioned chart have eased modestly, holding near overbought readings, rather reflecting the intraday retracement from daily highs than suggesting an upcoming slide."

Support levels: 0.7250 0.7200 0.7165

Resistance levels: 0.7315 0.7340 0.7375

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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