AUD/USD: Mildly bid near 0.7055 despite dismal Aussie trade figures
- AUD/USD keeps gains above 0.7050 after Australia reports a drop in trade surplus.
- Australia's imports dropped by 7% in August and imports fell by 2%.
Australia's trade surplus decreased in August, the official data released at 01:30 GMT showed. So far, however, that has failed to elicit an adverse reaction from AUD/USD.
The nation's imports tanked 7% month-on-month in August following July's 7% rise. Meanwhile, exports fell by 2% in August, having declined by 4% in July. The trade surplus decreased to AUD 4,294 million from AUD 4,607 million.
The sharp decline in inbound shipments indicates a weakening of domestic demand. Meanwhile, the consecutive monthly drop in outbound shipments indicates weak demand conditions in the global economy.
The data comes a day after Australia's retail sales for August showed a 4.2% decline in consumer spending.
As such, AUD/USD is likely to have a tough time charting a strong recovery rally. The currency pair rose from 0.7042 to 0.7062 ahead of the trade data, having printed a two-month low of 0.7016 on Thursday. At press time, AUD/USD is trading near 0.7055.
The pair's daily chart shows a bearish lower high, lower low pattern, a below-50 or bearish reading on the RSI, and descending short-term moving averages.
Hence, a drop to the 100-day simple moving average (SMA) support, currently at 0.70, looks likely.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
