AUD/USD probes intraday low beyond 0.7200 after China trade data
- AUD/USD keeps the early-day weakness despite upbeat trade numbers from Australia’s largest customer.
- China Trade Balance crossed 264.99N CNY forecast with CNY 442.33B, Exports mark notable increase but Imports linger.
- Market sentiment follows the pre-NFP trading lull, US stimulus deadlock grabbed the latest attention.
AUD/USD eases to 0.7215, down 0.30% on a day, after China released July month trade data on early Friday. The aussie pair has recently been clubbed between 0.7210 and 0.7220 following its U-turn from an 18-month top amid the initial Asian session.
China’s July month Trade Balance crossed forecast and prior while flashing 442.23B figures on a Chinese Yuan basis. Details suggest that the Exports surge from 2.3% expected and 4.3% previous marks to 10.4% but Imports reversed -0.7% market consensus with 1.6% figures.
Talking about the USD terms, Trade Balance grew $62.33B versus $42B expected while expected rose from -0.2% forecast to +7.2%. Imports, however, dropped below 1% prior to -1.4%.
Read: China’s July Trade data (USD): Surplus expands amid a surprise jump in exports
Other than the mixed data, the market’s cautious mood ahead of the key US employment figure also negatively affects the pair’s trading performance. The early-indicators of the key Nonfarm Payrolls, expected 1600K versus 4800K prior, suggest a disappointment likely brewing, which in turn makes the USD traders worried even as the greenback seesaws around a two-year low.
Read: Nonfarm Payrolls Preview: Hints point to an awful July
Elsewhere, the US lawmakers’ failure to deliver the much-awaited coronavirus (COVID-19) phase 4 package also weighs on the market sentiment. Further, the US-Canada tussle over aluminum tariffs and the Sino-American tussle, with TikTok in the spotlight recently, exert additional downside pressure on the pair.
Against this backdrop, the S&P 500 Futures drop 0.37% whereas stocks in Asia-Pacific also mark mild losses by the press time.
Looking forward, traders will have to keep eyes on the US employment figures, as well as stimulus news, for fresh impetus.
Technical analysis
Unless breaking an ascending trend line from May 22, coupled with 21-day EMA, near 0.7110-0.7100, the bears are less likely to take controls. As a result, bulls targeting the year 2019 top near 0.7300 should remain hopeful.
Author
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.
