AUDUSD Retests the Upside and Fails After the China Trade Data

The USD to AUD pair has been exhibiting a sideways price action within a range, with MAs confining AUD/USD in a 100-pip range. Traders await potential interest rate cuts from both, the Federal Reserve (FED) and the Reserve Bank of Australia (RBA), with data from China providing some support for the Aussie.

Recent Developments:

1. Trade Balance Data from China:
   • China’s trade balance data for May was anticipated to expand by $10 billion following a significant jump of $100 billion in April. The outcome of this data release had some influence on the AUD/USD pair.
2. Australian Q1 GDP Data:
   • Earlier this week, Australia released its Q1 GDP data, which was expected to remain stable at 0.2%. However, the lack of volatility in the data resulted in the price remaining within the range.
3. Dismal Australian Data:
   • Today, Australia reported disappointing data, including a significant decline in corporate profits quarter-on-quarter and annually, falling short of market expectations. Additionally, a current account deficit was reported for Q1 2024, following a surplus in the previous quarter.

AUD/USD Chart Daily – Rejected by the 200 SMA Again

So, the recent bullish momentum in the AUD/USD pair has primarily been driven by USD depreciation, as Australian data has not been very impressive. The AUD/USD pair has found support at 0.6580, where the 100-day Simple Moving Average (SMA) stands. Resistance is observed at the 200-day SMA (purple) on the daily chart, which has acted as a barrier to further upside movement.

The rejection at the 200-day SMA again yesterday, signals a potential downward movement in the pair, although further confirmation is needed. However, the recent improvement in Chinese economic indicators is a plus for the Australian dollar, as China is a key trading partner of Australia.

China Trade Balance for May

AUD/USD Live Chart

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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