- AUD/USD holds lower grounds near intraday bottom, prints the first daily loss in four.
- Aussie Westpac Consumer Confidence slumps for August but NAB sentiment numbers improved for July, China Trade Balance improves in July.
- Sentiment sours amid geopolitical woes, cautious mood ahead of top-tier data.
- US trade data may entertain traders ahead of the key Aussie/US inflation figures.
AUD/USD drops towards 0.6500 as it prints the first daily loss in four around 0.6550 amid early Tuesday morning in Europe. In doing so, the Aussie pair struggles to justify mixed Australian and China data while tracing the firmer US Dollar to keep the bears on the table.
That said, China’s headline Trade Balance rises to $80.6B versus $70.6B expected and $70.62B prior. Further details unveil that the Imports slumped -12.4% YoY compared to -6.8% previous readings and -5.0% market forecasts while Exports dropped -9.2% YoY from -8.3% prior, versus -8.9% expected.
Earlier in the day, Australia’s Westpac Consumer Confidence for August slumped to -0.4% versus 2.7% prior. Alternatively, the National Australia Bank's (NAB) Business Conditions for July edge higher to 10.0 from 9.0 prior and 8.0 market forecasts whereas the NAB Business Confidence came in to 2.0% compared to -1.0% market consensus and 0.0% prior.
Elsewhere, the market’s recent chatters about the geopolitical fears surrounding China join the cautious mood ahead of Thursday’s inflation clues from Australia and the US also weigh on the AUD/USD price. That said, China’s warning about using the face recognition system joins the latest Japan-China tension and the Sino-US tussles to weigh on the sentiment amid a light calendar and lackluster yields.
Against this backdrop, S&P500 Futures prints mild losses around 4,530 as it retreats towards the monthly low marked the last Friday, reversing the first daily gain in five marked on Monday. That said, the US 10-year and two-year Treasury bond yields remain pressured around 4.06% and 4.76% by the press time. It’s worth noting that Wall Street closed with the first daily positive in five by the end of Monday’s North American session.
Having witnessed the initial market reaction to the Aussie/China data, AUD/USD pair traders should keep their eyes on the risk catalysts ahead of the US Trade Balance for June and the NFIB business Optimism Index for July. However, Wednesday’s China Consumer Price Index (CPI) and Thursday’s Australian Consumer Inflation Expectations, as well as the US CPI, are the key for the AUD/USD pair to watch for a clear guide.
Technical analysis
Failure to cross the double bottoms marked in late June and early July, around 0.6600 by the press time keeps AUD/USD bears hopeful.
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