AUDUSD Steady Despite Disappointing Forex News from Australia

The Australian dollar finished yesterday’s trading flat. AUDUSD initially sold off following worse-than-expected GDP numbers from Australia. However, positive data from China and disappointing US data allowed the currency pair to bounce back from an intraday low of 0.6812. By the end of the New York session, AUDUSD was at 0.6844 which was also its opening price for the day.

Data Recap

Earlier in yesterday’s session, the Caixin services PMI printed at 53.5 versus the 51.2 forecast. On the other hand, the US ADP report for November was only at 67k and sorely missed the 137k forecast. The ISM non-manufacturing report also disappointed at 53.9 with the estimate at 54.5.

AU Retail Sales and Trade Balance Miss Forecasts

Will the Aussie be able to hold on to its gains above the 0.6800 psychological handle in today’s trading despite negative data?

Earlier today, the Australian Bureau of Statistics reported that retail sales did not grow in October. The reading for the month printed at 0.0% and fell short of the 0.3% forecast. On top of that, the trade balance report for the same month also missed consensus. It showed that the value of exports was only 4.50 billion AUD higher than the value of imported goods. Estimates were for a 6.50 billion AUD trade surplus for the month. We also saw a downward revision to September’s trade balance reading. Initially, the trade surplus was reported at 7.18 billion AUD. Earlier today, it was revised down to 6.49 billion AUD.

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AUDUSD Outlook

AUDUSD initially fell at the wake of the release of the two reports. The currency pair slid from its opening price of 0.6844 to 0.6831. However, as of this writing, the Australian dollar seems to have found enough bids in the market to remain steady.

On the 4-hour time frame, we can see that support at the 38.2% Fib level (drawing from the low of November 29 to the high of December 3) held nicely for the currency pair. If there are enough buyers in today’s trading, we may see AUDUSD re-test this week’s highs at 0.6861. The next near-term resistance is around 0.6878 where the falling trend line (from connecting the highs of November 27, 2018, April 17, 2019, July 18, 2019, and November 1, 2019) seems to coincide.

If AUDUSD gets rejected at this week’s highs or at the falling trend line, we could see the currency pair begin to trade lower to its November lows around 0.6753.Download our latest quarterly market outlook for our longer-term trade ideas.

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