The AUDUSD pair is little changed today as traders reflect on the strong trade data from China and the mild services index. Traders are also reacting to news that Victoria had extended its lockdown until later this month. The pair is trading at 0.7285, which is above the Friday’s low of 0.7235.
In a statement yesterday, government leaders in Victoria announced that they would extend the hard lockdown to the end of the month. The lockdown started in August 2 when new coronavirus cases started to emerge in Victoria and neighbouring Melbourne. Yesterday, the state reported more than 65 new cases, down from a peak of 725 in August 25.
The impact of the hard lockdowns has started to emerge in the country’s economy. Last week, data from AIG showed that the manufacturing index declined in August. And today, another data showed that the services sector has also been affected. The AIG services index dropped from the previous 44.0 to 42.5. All this is because of the importance of Victoria to the Australian economy.
Meanwhile, the AUDUSD pair is also reacting to strong trade numbers from China. According to the statistics office, the country’s exports increased by 9.5% in August while imports declined by 2.1%. This led the country’s trade surplus to drop from the previous $62.33 billion to $58 billion. Later this week, the Australian dollar will react to business confidence data from NAB and ANZ and consumer confidence data from Westpac.
AUDUSD technical outlook
The AUDUSD pair is trading at 0.7285. The daily chart shows that the price is above the ascending trendline that is shown in black. Also, the pair is above the 50-day and 100-day EMA and the important support level at 0.7030.
Therefore, the AUDUSD is likely to continue rising as bulls attempt to test the resistance at 0.7400. This level is along the upper side of the ascending trendline that is shown in blue. On the flip side a move below the ascending line will be a victory for bears, meaning that the price is likely to continue falling as bears aim for the next support at 0.7030.