AUD/USD stays pressured below 0.7150 after China data

  • AUD/USD remains depressed around the intraday low of 0.7134 after China’s Retail Sales, Industrial Production softened in July.
  • RBA’s Lowe keeps flashing mixed signals for rate and AUD strength after conveying dovish bias in the written testimony.
  • Market sentiment remains sluggish with US Treasury yields consolidating recent gains while S&P 500 Futures and ASX 200 stay mildly positive.
  • US consumer-centric data will be the key while comments from RBA’s Lowe can offer intermediate moves.

AUD/USD drops to 0.7138, down 0.13% on a day, after China released key data during the early Friday. The pair prints two-day losing streak while respecting USD recovery and mixed comments from RBA’s Lowe.

Weaker than expected prints of Industrial Production and Retail Sales defy the upbeat Fixed Asset Investment figures of -1.6% YoY.

Read: China’s July data dump: Retail Sales, Industrial Production disappoint, AUD/USD tests lows

Meanwhile, RBA Governor Philip Lowe is bearing the burden of a three-hour-long question-answer session as a part of his semi-annual testimony to the House of Representatives' Standing Committee on Economics. The policymaker initially struck a dovish tone while conveying economic uncertainty due to the coronavirus. However, his latest comments on the probabilities of negative rates and the strength of the Australia dollar have been mixed.

It should also be noted that Australia’s Victoria marked 372 new cases with 14 death for Thursday. “The state a day earlier reported 278 cases, its lowest one-day rise in more than three weeks, and eight deaths,” Reuters said.

Elsewhere, US President Donald Trump reiterates his economic optimism while also criticizing China. On the other hand, White House Adviser Larry Kudlow tries to keep the odds of a good meeting with diplomats from Beijing, scheduled for this weekend, by praising the dragon nation’s buying of the American agricultural products. Furthermore, US Senators keep jostling about the stimulus and there the pandemic conditions also become unclear amid lesser testing.

Against this backdrop, S&P 500 Futures rise 0.17% to 3,373 with ASX 200 adding 0.30% to 6,110 by the press time. Even so, the US 10-year Treasury yields trim the previous day’s gains while declining 0.5 basis points (bps) to 0.71% as we write.

Looking forward, market players will keep eyes on the RBA’s Lowe while waiting for the US Retail Sales and Michigan Consumer Sentiment data for fresh impetus. While RBA’s Lowe can keep troubling the AUD/USD bulls, the downbeat consensus from the headline Retail Sales adds worries for the USD traders.

Read: US Retail Sales July Preview: Expectations of moderation may be overstated

Technical analysis

A nine-day-old support line joins 21-day EMA to restrict the pair’s immediate downside around 0.7115/20, a break of which highlights 0.7065/60 region comprising June 10 high and July 24 low for the sellers. On the upside, 0.7200 holds the key to the pair’s latest high surrounding 0.7240.

Additional important levels

Today last price 0.714
Today Daily Change -8 pips
Today Daily Change % -0.11%
Today daily open 0.7148
Daily SMA20 0.7139
Daily SMA50 0.7011
Daily SMA100 0.6723
Daily SMA200 0.6711
Previous Daily High 0.7189
Previous Daily Low 0.7135
Previous Weekly High 0.7244
Previous Weekly Low 0.7076
Previous Monthly High 0.7228
Previous Monthly Low 0.6876
Daily Fibonacci 38.2% 0.7156
Daily Fibonacci 61.8% 0.7168
Daily Pivot Point S1 0.7126
Daily Pivot Point S2 0.7103
Daily Pivot Point S3 0.7072
Daily Pivot Point R1 0.718
Daily Pivot Point R2 0.7211
Daily Pivot Point R3 0.7234



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