AUD/USD retreats from multi-day high to 0.6650 despite upbeat Aussie/China data
- AUD/USD bulls pause after refreshing fresh highs since March 09.
- China’s Industrial Profits dropped less than prior, Australia’s Construction Work Done also recovered.
- Looming US sanctions on China, likely protests in Hong Kong challenge the previous risk-on sentiment.
- Qualitative catalysts will gain major attention amid a light calendar.
AUD/USD pays little heed to better than forecast data while declining to 0.6645, down 0.08% on a day, amid the Asian session on Wednesday.
While Australia’s first quarter (Q1) Construction Work Done bounced of -3.0% prior and -1.5% forecasts to -1.0%, China’s Industrial Profits for April shrank 4.3% YoY versus the previous fall of 34.9%.
Markets’ previous optimism, backed by hopes of economic restart and virus cure, seems to have faded off-late. The reason could be cited from US President Donald Trump’s signals to levy fresh sanctions on China. Also stopping the risk-takers were concerns highlighted by Reuters suggesting a major protests brewing inside Hong Kong.
As a result, US 10-year Treasury yields pair their previous day’s run-up whereas stocks in Australia register mild losses by the press time.
Considering the lack of major data/events up for publishing during the rest of the Asian session, traders will keep eyes on the US-China tussle for fresh clues. It should also be noted that any updates concerning the Hong Kong protests will add downside pressure on the AUD/USD pair.
Technical analysis
Buyers remain cautious unless the pair registers a daily closing beyond 200-day SMA level around 0.6660, which in turn highlights the monthly support line, currently around 0.6460, for sellers.
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.
