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Currency
by FXOpen on January 21st, 2019

The Aussie lower on Chinese GDP data

The pair AUD/USD edged higher on the back of an above-forecast China industrial production data.

Industrial production in China rose to 5.7 percent year-on-year in December, significantly exceeding the forecast of 5.3 percent. The readings above the forecast can be taken as a sign that global demand may not be as weak as previously thought. Meanwhile, retail sales rose to 8.2 percent in December, as expected.

However, AUD risks returning to session lows of around 0.7150, as China’s growth rate in the fourth quarter slowed to 6.4 percent year-on-year — the lowest since early 2009 — more so because the PBOC and the government of China are unlikely to introduce a flood-like incentive to support a sick economy.

AUD/USD Technical Analysis

The Aussie dollar failed to break the 0.7210 resistance recently and later started a downward move against the US Dollar. The AUD/USD pair declined and broke the 0.7200 and 0.7180 support levels.

AUDUSD-Chart

There was also a close below the 0.7180 support and the 50 hourly simple moving average. Moreover, there was a break below a connecting bullish trend line with support at 0.7165 on the hourly chart, which later acted as resistance.

The pair recently corrected higher, but it struggled near the broken trend line and the 50% Fib retracement level of the last decline from the 0.7215 high to 0.7149 low.

Overall, the current price action is bearish and it seems like AUD/USD may continue to move down towards the 0.7150 or 0.7120 support levels. On the upside, the main resistances are 0.7180 and 0.7200.

By FXOpen

FXOpen is a Forex and Cryptocurrency broker founded in 2005 by a group of traders. With over 10 years of experience, the company has established itself as a major Forex broker that continues to expand rapidly across the globe. FXOpen offers the MT4 and MT5 Forex trading platform with a wide range of trading instruments including 100+ FX, CFDs, Indices and Cryptocurrency markets. FXOpen also provides its own PAMM technology allowing clients to benefit from the strategies of professional traders with a proven track record of successful trading. The FXOpen Group also includes the ASIC regulated FXOpen AU in Perth Australia and the London-based FXOpen UK that is regulated by the FCA.

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