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  • Upbeat data from China helps AUD gather strength.
  • US Dollar Index continues to push lower toward 97.
  • AUD/USD looks to post gains for fourth straight week.

The AUD/USD pair continued to push higher toward the critical 0.7000 handle on Friday supported by the broad-based USD weakness and the upbeat data from China. After touching its highest level since late July at 0.6977, the pair retreated slightly and was last seen trading at 0.6970, adding 0.37% on a daily basis.

Chinese economy shows signs of life

Earlier in the day, the data published by China’s National Bureau of Statistics (NBS) revealed that Industrial Profits, which declined by 9.9% on a yearly basis in October, rebounded sharply and rose 5.4% in November to ease concerns over an economic slowdown in the world’s second-largest economy.

Commenting on that data, “with manufacturing PMI switching back to above 50 in November, industrial profits also showed strength in the manufacturing industry,” said ING analysts. “Industrial profits grew by 5.4% year on year in November after a contraction of 9.9%YoY in October, marking the fastest growth in 2019 except in March.”

On the other hand, the USD came under strong selling pressure on Friday to help the pair stretch higher. The US Dollar Index erased all the gains it registered last week and earlier this week and was last down 0.43% on the day at 97.14. The absence of significant macroeconomic drivers on Friday suggests that year-end flows and thin liquidity are causing the USD to underperform.

With today’s upsurge, the pair remains on track to post weekly gains for the fourth straight week.

Technical levels to watch for