Positive Chinese data helped AUD/USD close the week higher despite domestic data missing expectations across the board. Australian Trade deficit increased surprisingly, while retail sales showed contraction.
But as I mentioned above, Australia’s trade partner China helped buoy risk sentiment and support the Aussie higher. China’s trade surplus was above forecast as exports increased at a very positive rate . This can be partially attributed to an increase in the EU’s and U.S.’s appetite for Chinese goods, marking the first year-on-year increase since May.
This week’s highlight is sure to be the employment data, especially after the previous two months' positive surprises. Last month AUD/USD got a boost after the number of employed people increased by 13.9k, well above the forecast 0.2%, whilst the unemployment rate declined to 5.2% from 5.4%. Things aren’t expected to be quite as rosy this time around with only 2.3k new jobs expected to be added, while the unemployment rate is forecast to jump up to 5.4%.
AUD/USD is testing a major resistance zone that sits between 1.0583 and 1.0624 where a break would have bullish implications as fresh higher high would effectively be set on the daily chart. However, until that point, AUD/USD remain in a longer term downtrend.
- AUD/USD is testing the confluence of resistance levels of its medium term range.
- Above 1.0624 key level the outlook becomes more bullish.
- Will longer term resistance offer sellers the opportunity to enter and push price back to the lower end of the range?
- Key support lies at 1.0473 and 1.0341.
Neutral Bias. Bullish Above 1.0624