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AUD/USD struggles for direction around 0.7700 amid mixed China data dump

  • AUD/USD trims intraday losses but fails to stay above 0.7700.
  • China’s Q4 GDP, December Industrial Production improve but Retail Sales eases.
  • Risk dwindles amid cautious sentiment ahead of new government in the US, virus woes.
  • Off in America, light calendar elsewhere may challenge momentum traders.

AUD/USD wavers around 0.7700 following mixed data releases from China during early Monday. The quote initially pierced the 0.7700 threshold while cheering upbeat GDP and Industrial Production data from the largest customer but couldn’t ignore weaker than expected Retail Sales. Also challenging the quote could be risk-off mood and the US dollar strength.

China’s fourth-quarter (Q4) GDP grew from 6.1% to 6.5% YoY but eased on QoQ basis to 2.6% versus 3.2% forecast and 2.7% prior. Further, Industrial Production for December rose past-6.9% expected to 7.3% YoY whereas Retail Sales dropped below 5.0% previous readouts and 5.5% market consensus.

Read: Chinese data dump: Monthly activity weaker and GDP YoY beats

Considering the lack of reaction to China data, AUD/USD traders seem taking clues from the risk catalysts where S&P 500 Futures and stocks in Asia-Pacific stay heavy by the press time.

Behind the moves could be the chatters that US President-elect Joe Biden will cancel Canada’s Keystone XL pipeline permit and upcoming Treasury Secretary Janet Yellen’s commitment to market-determined dollar value. Also, the coronavirus (COVID-19) woes and doubts over China’s economic improvement are an extra burden that weighs on the AUD/USD prices.

Virus numbers have receded in the UK while those from the US and Japan remain worrisome. Global vaccine producers remain optimistic over the capacity to tame the virus strains but fail to defy the woes. At home, Australians can avail overseas travels from now while much of Sydney cleared for Victorians to return from 6:00 pm tonight. However, there are 10 council areas in Sydney's West and south-west regions that still bear the tag of "Red" zones.

Read: New UK covid stats lower despite variant, vaccine rolled out

Having witnessed the initial impact of the Chinese data dump, AUD/USD traders may revisit the risk catalysts as the Wall Street Journal earlier raised doubts over China’s economic improvement, based on the report from the International Monetary Fund (IMF). It should, however, be noted that major attention will be given to the hints on how the Biden government will act during the initial ruling and the virus updates for short-term direction. Traders should also take note of the US off, due to Martin Luther King’s Birthday, as this will reduce market moves.

Technical analysis

AUD/USD sellers cheering downside break of an ascending trend line from November 02, at 0.7732 now, need validation from 21-day SMA level of 0.7682, to firm up the grips, failing to do so can re-direct traders toward the 0.7800 threshold.

Additional important levels

Overview
Today last price0.7699
Today Daily Change-9 pips
Today Daily Change %-0.12%
Today daily open0.7708
 
Trends
Daily SMA200.7681
Daily SMA500.751
Daily SMA1000.7345
Daily SMA2000.7092
 
Levels
Previous Daily High0.779
Previous Daily Low0.768
Previous Weekly High0.7806
Previous Weekly Low0.7665
Previous Monthly High0.7743
Previous Monthly Low0.7338
Daily Fibonacci 38.2%0.7722
Daily Fibonacci 61.8%0.7748
Daily Pivot Point S10.7662
Daily Pivot Point S20.7617
Daily Pivot Point S30.7553
Daily Pivot Point R10.7772
Daily Pivot Point R20.7836
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.

More from Anil Panchal
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