- US Dollar Index turns flat on the day above 96.60.
- Both exports and imports continue to decline in China.
The AUD/USD came under heavy selling pressure in the early Asian session on Monday and broke below the 0.72 mark. Although the pair was able to retrace a small part of its daily drop, it remains in the negative territory. As of writing, the pair was down 0.3% on a daily basis at 0.7190.
Earlier today, the data from China showed that the trade surplus rose to $57 billion in December from $44.7 billion in November. However, with the imports contracting 7.6% compared to a 4.45% decline seen in exports, the increase in the trade surplus failed to trigger a positive reaction in the markets and weighed on the AUD, which is very sensitive to Chinese data.
On the other hand, with investors waiting for fresh developments about the government shutdown in the U.S., the US Dollar Index fluctuates in a relatively tight range on Monday. After edging down to a session low of 95.53, the index staged a modest rebound and was last at 95.65, where it was virtually unchanged on the day. With no macroeconomic data scheduled to be released from the U.S. on Monday, political headlines from the U.S. could cause the volatility to increase. Otherwise, the pair is likely to stay in its daily range.
Technical levels to consider
The pair could face the first technical support at 0.7175 (daily low/50-DMA) ahead of 0.7090 (20-DMA) and 0.7000 (psychological level). On the upside, resistances are located at 0.7200 (psychological level), 0.7235 (Jan. 11 high) and 0.7325 (Nov. 28, 2018, high).
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