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AUD/USD drops back to 0.6950 as China Customs resists cheering upbeat trade figures for 2022

  • AUD/USD takes offers to refresh intraday low even as China reported record trade volume in 2022.
  • Chatters surrounding US-backed hardships of Chinese chipmakers, cautious Fed talks add strength to the pullback moves.
  • Rebound in Treasury bond yields, lackluster session also weighs on AUD/USD prices.
  • US consumer-centric data, Fed talks eyed for clear directions.

AUD/USD fails to cheer China’s housing policy support, as well as upbeat trade numbers for 2022, amid fears of hardships in 2023. In doing so, the Aussie pair reverses the US CPI-inspired gains to 0.6950 amid a lackluster Asian session on Friday.

That said, China’s Trade Balance figures jumped to a record high in Yuan terms for 2022, up 7.7% YoY. However, China Customs Spokesperson Lyu Daliang mentioned that China's foreign trade will continue to face a number of challenges and difficulties in 2023, per Reuters. While conveying the data, Xinhua mentioned that  China's total goods imports and exports hit a record high again in 2022, expanding 7.7% year on year to 42.07 trillion yuan (about 6.25 trillion U.S. dollars).

In addition to the upbeat trade numbers, China’s plan to announce $15 billion in support to the housing market, via rental housing loans, also appears a positive that should have favored the AUD/USD pair to extend the previous day’s gains. However, headlines suggesting fresh US-China tussles and mixed comments from the Fed policymakers seem to have triggered the quote’s profit-booking moves.

Reuters cites anonymous sources to state that the White House will discuss a recent crackdown on exports of chip-making tools to China with Japanese and Dutch officials during upcoming visits. The news also mentions that the White House Officials will not result in "immediate" pledges from the two countries to impose similar curbs.

On the other hand, Atlanta Federal Reserve Bank President Raphael Bostic mentioned that he would be comfortable moving at 25 basis points if conversations with business leaders are consistent with slowing inflation. Fed’s Bostic previously stated that it is ''fair to say that the Fed is willing to overshoot.'' Even so, the policymaker refrained from backing the talks that the Fed will stop rate hikes in 2023. The same could be witnessed in the previous comments from Federal Reserve Bank of Philadelphia President Patrick Harker and Richmond Federal Reserve President Thomas Barkin.

Alternatively, St. Louis Federal Reserve leader James Bullard also said that the most likely scenario is inflation remaining above 2%, so the policy rate will need to be higher for longer.

Amid these plays, the S&P 500 Futures print mild losses even if Wall Street closed with gains while the US 10-year Treasury yields lick their wounds near 3.46% by the press time, following a slump to the monthly low of 3.44% the previous day.

Looking forward, the first prints of the US Michigan Consumer Sentiment Index (CSI) for January, as well as the 5-year US Consumer Inflation Expectations, will be important to watch for AUD/USD traders.

Technical analysis

Failure to provide a daily closing beyond the two-month-old ascending resistance line, around 0.6975 by the press time, joins the RSI retreat to favor the AUD/USD pair’s pullback. However, bears remain confused unless the quote stays beyond the December 2022 peak of 0.6932.

Additional important levels

Overview
Today last price0.695
Today Daily Change-0.0018
Today Daily Change %-0.26%
Today daily open0.6968
 
Trends
Daily SMA200.678
Daily SMA500.6729
Daily SMA1000.6634
Daily SMA2000.6834
 
Levels
Previous Daily High0.6985
Previous Daily Low0.6877
Previous Weekly High0.6887
Previous Weekly Low0.6688
Previous Monthly High0.6893
Previous Monthly Low0.6629
Daily Fibonacci 38.2%0.6944
Daily Fibonacci 61.8%0.6918
Daily Pivot Point S10.6902
Daily Pivot Point S20.6836
Daily Pivot Point S30.6794
Daily Pivot Point R10.701
Daily Pivot Point R20.7051
Daily Pivot Point R30.7118

Author

Anil Panchal

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.

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