Overbought Aussie struggles despite upbeat China GDP data

The overbought AUD/USD spot is having a tough time cheering the upbeat China June GDP. The currency has recovered from the session low of 0.7811, but trades flat lined on the day around 0.7822 levels. 

China’s Apr to June GDP came-in at 6.9%, beating the estimate of 6.8%. The industrial production printed at 7.6% y/y, bettering the estimate of 6.5%, while retail sales rose 11% y/y, again a beat on the estimate of 10.6%. 

The strong data has failed to boost the Aussie 10-year bond yield, which trades unchanged on the day around 2.73%. The lacklustre action in the bond yields also explains the exhaustion seen in the AUD/USD spot. 

AUD/USD Technicals

Valeria Bednarik, Chief analyst at FXStreet says, “The pair is bullish, with technical indicators heading sharply higher, despite being in overbought levels, whilst the 20 SMA accelerate higher, but stands far below the current level. In the 4 hours chart, the RSI indicator turned horizontal around 86, while the Momentum indicator eased modestly, holding within extreme overbought territory, while the 20 SMA heads north almost vertically, but anyway lagging from price's action, also maintaining the risk towards the upside.” 

AUD/USD Technical Levels

The 14-day RSI is extremely overbought. The key resistance levels are 0.7831 (2011 high - 2016 low) - 0.7835 (Apr 2016 high), 0.7982 (monthly 200-MA), 0.80 (psychological level). The key support levels are 0.7778 (Nov 2016 high), 0.7749 (Mar 2017 high), 0.77 (weekly 5-MA). 

  TREND INDEX OB/OS INDEX VOLATILY INDEX
15M Strongly Bearish Neutral High
1H Bearish Neutral Low
4H Bullish Overbought High
1D Bearish Overbought High
1W Bullish Overbought Expanding

 

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