- AUD/USD witnessed a subdued/range-bound price action on the first day of the week.
- A cautious mood in the equity markets acted as a headwind for the perceived riskier aussie.
- Mostly disappointing Chinese macro data did little to impress bulls or provide any impetus.
The AUD/USD pair extended its sideways consolidative price action and remained confined in a narrow trading band, around the 0.7400 mark post-Chinese data dump.
The pair struggled to capitalize on its early uptick back closer to over one-month tops touched on Friday and witnessed a modest pullback from the 0.7435 region on the first day of a new week. The prevalent cautious mood around the equity markets was seen as a key factor that acted as a headwind for the perceived riskier aussie amid a subdued US dollar price action.
This, along with weaker than expected Chinese macro releases, collaborated to cap the upside for the China-proxy Australian dollar. The National Bureau of Statistics of China reported this Monday that the economic growth in the world's second-largest economy decelerated to 0.2% and 4.9% YoY rate during the third quarter, as against the previous quarter's 1.3% and 7.9%, respectively.
Adding to this, China's Industrial Production also fell short of market expectations and increased by a 3.1% YoY rate in September, down from 5.3%. This, to a larger extent, offset a better than expected monthly Retail Sales figures, which recorded a growth of 4.4% in September. This comes amid fears of a faster than expected rise in inflation and added to worries about stagflation.
That said, the market reaction, so far, has been limited and warrants some caution for aggressive traders. The recent widespread rally in commodity prices turned out to be a key factor that continued lending some support to the resources-linked aussie. Hence, it will be prudent to wait for a strong follow-through selling before confirming that the AUD/USD pair has topped out in the near term.
Technical levels to watch
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 alternates gains with losses near 1.0720 post-US PCE
The bullish tone in the Greenback motivates EUR/USD to maintain its daily range in the low 1.070s in the wake of firmer-than-estimated US inflation data measured by the PCE.
GBP/USD clings to gains just above 1.2500 on US PCE
GBP/USD keeps its uptrend unchanged and navigates the area beyond 1.2500 the figure amidst slight gains in the US Dollar following the release of US inflation tracked by the PCE.
Gold keeps its daily gains near $2,350 following US inflation
Gold prices maintain their constructive bias around $2,350 after US inflation data gauged by the PCE surpassed consensus in March and US yields trade with slight losses following recent peaks.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.