- AUD/USD respects better than forecast increase in Industrial Production and Retail Sales.
- The US gaining an upper hand in the latest trade deals helps greenback to cheer the recently upbeat US data.
- Few more of the US data-dossier, Fedspeak and trade/political headlines will be in focus for now.
AUD/USD rises to 0.6900 after China released the latest batch of headline data during early Friday. The pair pulled back from 21-day SMA resistance during the previous day amid broad USD strength.
China’s fourth-quarter (Q4) GDP numbers remained unchanged, while also meeting the forecast, at 6.0% YoY and 1.5% QoQ. However, Retail Sales grew past-7.8% expectations to reprint 8.0% growth whereas Industrial Production crossed 5.9% market consensus and 6.2% prior with a rise to 6.9%.
The pair registered losses the previous day after the US dollar gained across the board on the upbeat activity numbers and retail sales data. The same increased the odds for the US Federal Reserve (Fed) to rethink their ‘on hold’ monetary policy decisions. “We also expect additional policy easing in our key trading partners of China and Australia. Against that backdrop, risk assets are expected to continue to perform well,” said analysts at the Australia and New Zealand Banking Group (ANZ).
It should also be noted that the US trade deals with China, Mexico and Canada give it the authority to ignore the World Trade Organization (WTO) as per the Wall Street Journal (WSJ), and can be considered as providing additional strength to the greenback.
Markets will now concentrate on the US data that include the December month housing market and Industrial Production numbers coupled with the Michigan Consumer Sentiment Index for January. Other than the statistics, few of the Fed policymakers are also lined up for speaking and may move the markets should they emphasize on the recent recovery in headlines economics.
Ahead of the US releases, TD Securities said, “Following a 1.1% m/m rebound, we look for industrial production to retreat again, posting a -0.5% decline for Dec. We expect weakness in utilities, to a larger extent, and manufacturing to drive production lower during the month. We also forecast a small decline in housing starts to 1,360k in Dec (from 1,380k), while we look for UMich's consumer sentiment index to improve to 100.5 for Jan's preliminary release (from 99.3).”
Technical Analysis
AUD/USD prices need to provide a daily closing beyond a 21-day SMA level of 0.6930 to aim for 0.7000, until then risks of revisiting the monthly bottom near 0.6850 can’t be denied.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.