Overbought Aussie struggles despite upbeat China GDP data

Omkar Godbole FXStreet Contributor

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
Updated Jul 17, 02:00 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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