- AUD/USD registers 0.20% loss, buffeted by weak Chinese GDP and Retail Sales data; USD rebounds after its worst week since November 2022.
- US equities remain unscathed despite mixed Chinese economic data; Forex traders eye Tuesday’s US Retail Sales and Industrial Production figures.
- Leadership change at the Reserve Bank of Australia (RBA) adds an element of uncertainty; the release of RBA monetary policy meeting minutes eagerly awaited.
AUD/USD dropped from around the 0.6850 area amid a possible global economic outlook, as soft economic data from China weighed on the Australian Dollar (USD). That bolstered the US Dollar (USD), which posted its worst week since November 2022. At the time of writing, the AUD/USD is trading at 0.6822, with losses of 0.20%.
Economic slowdown in China and expectations for positive US Retail Sales, a headwind for AUD/USD
US equities shrugged off mixed data from China that painted a gloomy economic outlook after the Gross Domestic Product (GDP) in China expanded by 0.8% QoQ, beneath the first quarter (Q1) by 2.2%, while on an annual basis, the economy grew at a 6.3% pace, below 7.1% forecasts, above Q1’s 4.5%. In the meantime, Industrial Production gathered pace, while Retail Sales decelerated sharply from 12.7% in May to 3.1% in June.
A light US economic docket keeps AUD/USD traders focused on the release of Retail Sales on Tuesday, which are expected to rise by 0.5%, above the prior month’s 0.3%. The latest US Consumer Sentiment report spurred speculations about June’s retail sales report, as consumers remain optimistic about the economy. On the same day, the US Federal Reserve (Fed) will unveil US Industrial production, estimated at 0% MoM, below May 0.2% expansion.
On the Australian front, news emerged the Reserve Bank of Australia (RBA) Governor Philip Lowe would not continue as the head of the bank and would be substituted by the current Deputy Governor Michele Bullock. Aside from this, the RBA would unveil its latest monetary policy meeting minutes.
AUD/USD Price Analysis: Technical outlook
The AUD/USD rally was capped shy of breaching the 0.6900 figure, exacerbating a downward correction, past the May 10 daily high of 0.6818, with the AUD/USD extending its fall toward a daily low of 0.6787 before trimming some of its losses. A daily close above 0.6818 could pave the way for AUD/USD to retest 0.6900. A decisive break will expose the 0.7000 figure, but firstly, the AUD/USD buyers must regain the February 21 high at 0.6919. Conversely, the AUD/USD first support would be 0.6800, followed by the current week’s low of 0.6787.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.