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AUD/USD remains on the way to 0.7820 hurdle ahead of China data dump

  • AUD/USD wavers around Friday’s top after posting the heaviest weekly loss in 11 weeks.
  • Market sentiment improved after US data came in weaker, backing the Fed’s defense to easy money policy.
  • Covid, geopolitical plays probe bulls amid cautious mood ahead of the top-tier data from the key customer China.

AUD/USD begins the week mostly unchanged, around 0.7770-80, as bulls stay hopeful after Friday’s upbeat mood. Fresh hopes backing the US Federal Reserve’s (Fed) easy money policies, due to the recent weakness in American data, helped the quote on Friday. The Aussie pair’s recent strength could also be considered as a consolidation to the last week’s heavy fall, the biggest since late February.

Can China spoil the mood?

On Friday, no growth of the US Retail Sales for April joined May’s downbeat Michigan of Consumer Sentiment Index backed the Fed policymakers trying to defend versus the rate hike and/or tapering woes. The positive sentiment could also be traced to the modest strength in the US Industrial Production, a 0.7% upside, for April.

With the inflation concerns seem mostly priced, coupled with the recently mixed data and the Fed’s strong defense to monetary policy, US equities managed to close the week on the positive side. Also portraying the risk-on mood was the US dollar index (DXY) that dropped the most in a week on Friday while the US 10-year Treasury yield also shed 3.3 basis points to 1.635% by the end of the week’s trading.

Other than the reflation fears, geopolitical unrest in the Middle East and covid woes in Asia remains the challenging factors for the markets. However, steady vaccinations and hopes of strong economic recovery in the West outweigh them.

Hence, the commodities remained mostly on the front foot, mainly the gold prices, which in turn offered extra support, in addition to the upbeat trading sentiment, to the AUD/USD bulls.

It should, however, be noted that the pair traders currently await China’s Industrial Production and Retail Sales for April, expected 9.8% and 24.9% YoY respectively versus 14.1% and 34.2% in that order. Although the key figures from Australia’s major customer are likely to come in weaker, suggesting a downside risk to the AUD/USD prices and market sentiment, any upside surprise will be welcomed with zeal.

Technical analysis

AUD/USD remains above a confluence of 50-day and 100-day SMA around 0.7710-20, suggesting another attempt to cross the resistance around 0.7820, comprising multiple tops marked since January. However, sluggish oscillators indicate weakness in trading momentum to break the key hurdle to the north.

Additional important levels

Overview
Today last price0.7776
Today Daily Change-0.0001
Today Daily Change %-0.01%
Today daily open0.7777
 
Trends
Daily SMA200.7763
Daily SMA500.7712
Daily SMA1000.7723
Daily SMA2000.7495
 
Levels
Previous Daily High0.7788
Previous Daily Low0.7713
Previous Weekly High0.7892
Previous Weekly Low0.7688
Previous Monthly High0.7819
Previous Monthly Low0.7531
Daily Fibonacci 38.2%0.7759
Daily Fibonacci 61.8%0.7742
Daily Pivot Point S10.7731
Daily Pivot Point S20.7684
Daily Pivot Point S30.7656
Daily Pivot Point R10.7806
Daily Pivot Point R20.7834
Daily Pivot Point R30.7881

Author

Anil Panchal

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.

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