AUD/USD trades near daily highs, looks to regain 0.77
- Pair's price action continues to lack directional strength.
- Economic docket in the U.S. won't be offering any significant data.
- DXY remains stuck in tight range below 95 handle.
The AUD/USD pair continues to have a difficult time determining its next short-term direction as the market volatility remains low due to the quiet economic calendar. At the moment, the pair is trading at 0.7680, gaining 35 pips, or 0.45%, on the day.
Chinese data disappoints
Earlier in the day, the macroeconomic data from China, Australia's biggest trading partner, showed that the trade surplus increased to $38.2 billion, missing the market estimate of $39.5 billion. Moreover, the country's annual export growth rate eased to 6.9% from 8.1%. Although the dismal data hurt the demand for the aussie and pushed the AUD/USD pair to a fresh daily low at 0.7643, the greenback's broad-based weakness allowed the pair to reverse its direction.
Amid the uncertainty surrounding the legalization of the GOP tax bill, investors are refraining from committing to heavy USD positions, forcing the US Dollar Index to stay below the critical 95 mark. At the moment, the index is at 94.78, virtually flat on the day.
Despite today's price action, the pair is confined in a 75-pip range since Monday. This week's RBA meeting failed to provide a catalyst for the pair as it didn't offer anything surprising to the markets. With an empty economic calendar in the remainder of the session, the pair is likely to extend its consolidation. Early in the Asian session, the RBNZ is going to release its monetary policy statement and a sharp reaction from the NZD/USD pair could impact the positively correlated AUD/USD pair.
Technical outlook
On the upside, 0.7700 (psychological level/200-DMA) aligns as a critical resistance and a daily close above that level could open the door for further recovery gains toward of 0.7750 (20-DMA) and 0.7830 (Oct. 23 high). On the downside, supports could be seen at 0.7625 (Oct. 27/Nov. 7 low), 0.7570 (Jul. 7 low) and 0.7500 (psychological level).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
