AUD/USD is on the defensive as China retail sales indicate softening domestic demand

The Aussie dollar is erasing gains after a weaker-than-expected China retail sales release.
China's economy could slow more than expected in the coming quarters a domestic demand is showing no signs of life.
Above-forecast China industrial production and fixed asset investment data may cap the downside in the AUD/USD.

Omkar Godbole FXStreet Contributor

The Aussie dollar, a proxy for China, is feeling the pull of gravity after China reported a sharp slowdown in the retail sales in October.

The data came in at 8.6 percent, missing the estimated figure of 9.1 percent. The big miss reinforces the view that domestic demand remains soft and is unlikely to support the economy, which may feel the heat of Trump's trade war in the coming quarters.

Simply put, China's economy could slow more than previously anticipated as domestic demand is unlikely to compensate for the drop in international trade's share in GDP.

As a result, the Aussie dollar risks falling into the red during the day ahead. As of writing, the AUD/USD is reporting marginal gains at 0.7226, having clocked a high of 0.7239 earlier today.

A better-than-expected China industrial production and fixed asset investment figure may have put a floor under the Aussie dollar.

AUD/USD Technical Levels

AUD/USD

Overview:
    Last Price: 0.7225
    Daily change: 14 pips
    Daily change: 0.194%
    Daily Open: 0.7211
Trends:
    Daily SMA20: 0.7148
    Daily SMA50: 0.7161
    Daily SMA100: 0.7259
    Daily SMA200: 0.7462
Levels:
    Daily High: 0.7226
    Daily Low: 0.7164
    Weekly High: 0.7304
    Weekly Low: 0.7183
    Monthly High: 0.724
    Monthly Low: 0.702
    Daily Fibonacci 38.2%: 0.7202
    Daily Fibonacci 61.8%: 0.7187
    Daily Pivot Point S1: 0.7174
    Daily Pivot Point S2: 0.7138
    Daily Pivot Point S3: 0.7112
    Daily Pivot Point R1: 0.7237
    Daily Pivot Point R2: 0.7263
    Daily Pivot Point R3: 0.7299

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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