EUR/AUD at fresh weekly low on better than expected China trade balance

EUR/AUD registered fresh low of the week around 1.5850 during early Thursday.
The pair declined after China released upbeat trade balance data.
Presently, 1.5780 seem immediate support while 1.6000 can act as adjacent resistance.

Anil Panchal FXStreet

The EUR/AUD pair dropped to the week’s low near 1.5850 heading towards European session on Thursday. The prices slipped after China released better than expected January month figures of trade balance. Adding to the strength was recent optimism at US-China trade deal and weaker EU data published Wednesday.

The Australian Dollar (AUD) gained more than 100 pips against the Euro on Wednesday as comments from the US President favoring a trade deal with China and likely extending dates to levy fresh tariffs after the March 01 deadline helped the Aussie. Also, weaker than expected -0.4% contraction in the Eurozone industrial production to -0.9% dragged the EUR down.

During early Thursday, China released January month trade balance data that beat market consensus in both the Chinese Yuan (CNY) and USD terms. In case of the CNY, the trade balance figures came in at 271.42 billion compared to 395 billion CNY noted in the December last year. On the USD part, the trade balance beat expectations of $33.50 billion by registering $39.16 billion surplus.

Looking forward, investors may observe developments at the US-China trade front on the first day of negotiation. Treasury Secretary Steve Mnuchin sound optimistic before the start and so was the mood of the US President Donald Trump on late yesterday. It should also be noted that growth domestic product (GDP) numbers for Germany and Eurozone could play their part of catalysts too.

The German GDP for the last quarter of 2018 is likely to have growth by +0.1% against -0.2% contraction noted in third quarter. In case of seasonally adjusted Eurozone GDP figures, the quarterly and yearly change over the fourth quarter of 2017 are both likely to meet initial estimates of 0.2% and 1.2% respectively.

EUR/AUD Technical Analysis

Successful break of 1.5850 can drag the pair to 1.5780 and the 1.5720 during further declines whereas 1.5670 and 1.5580 may challenge the bears past-1.5720.

On the flipside, 1.6000 round-figure could keep restricting near-term advances, a break of which might not hesitate flashing 1.6070 and 1.6155 on the chart.

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.

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