AUD/USD remains depressed around mid-0.7700s on downbeat China data

AUD/USD takes offers around 0.7750, down 0.31% intraday, as data from largest customer China disappoints Aussie traders during early Monday. The pair’s downside could also be termed as a consolidation to Friday’s heavy run-up, earlier backed by the risk-on mood, amid mixed sentiment.

China Retail Sales slip beneath 34.2% prior and 24.9% forecast to 17.7% YoY whereas Industrial Production matches 9.8% market consensus versus 14.1% previous readouts.

Read: Chines data dump misses expectations, AUD a touch softer

Other than the scheduled data, mixed plays between the geopolitical tussles in the Middle East and fears of escalating Aussie-China tension, as signaled by Friday’s WoodMackenzie report, also trouble the AUD/USD bulls. Although the United Nations (UN) refrained from any direct meddling into the Gaza affair, China blames the US for the same tames the upbeat sentiment. Also on the risk-negative side were fears that China’s informal ban on Aussie coal imports will stay until 2022.

Elsewhere, the reflation woes remain on the table but the Fedspeak seems successful in defending the easy money policies after Friday’s downbeat US data. Additionally, the coronavirus (COVID-19) troubles in Asia contrast faster vaccinations in the West and hopes of stronger economic recovery in the UK and the US.

Amid these plays, S&P 500 Futures and Australia’s ASX 200 both print mild gains by the press time. However, the US dollar index (DXY) consolidates Friday’s losses while the US 10-year Treasury yield remains pressures around 1.62% while writing.

Moving on, a light calendar can keep AUD/USD traders searching for clues. However, headlines concerning inflation and Fed’s next move, not to forget geopolitics and trade, could offer intermediate moves. Overall, US dollar weakness may keep AUD/USD buyers hopeful unless any extreme risk-off mood, which is less likely.

Technical analysis

Unless breaking a confluence of 50-day and 100-day SMA around 0.7710-20, AUD/USD stays directed towards 0.7820 hurdle, comprising multiple tops marked since January. However, sluggish oscillators indicate weakness in short-term trading momentum.