AUD/USD Continues Down, With No Help from Chinese Data
AUD/USD has been declining since July and has continued declining since, owing to global worries that have driven traders away from risk assets. But mostly it has come from a strengthening US dollar, which is actually showing signs of weakness now as the FED doesn’t seem to want to hike again. Last week we saw a strong retreat in the USD after the FOMC meeting, after Jerome Powell didn’t hint another rate hike in December, which sent AUD/USD above 0.65 for a short while.
But, buyers couldn’t hold the price up there and the 100 SMA (green) turned into resistance for this pair on the daily chart. This week we are seeing a reversal lower after the rejection at the 100 SMA. The fluctuations in the Chinese economy unavoidably echo through the Australian currency and economy, emphasizing their interdependence. China’s economy on the other hand, has encountered significant hurdles this year across a wide range of industries, pushing this pair below 0.63, but the price created a base there and the pair rallied higher last week, but paused above the 100 SMA ahead of the RBA decision.
The Reserve Bank of Australia (RBA) raised interest rates by 25 basis points in the last meeting, from 4.10% previously to 4.35% and left the door open for additional hikes, but the bid for the US dollar are driving the pair down. Today we also had the October CPI inflation repot from China.
China Consumer Price Index Inflation Report for October
AUD/USD Live Chart
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