- The surge in China’s industrial profits after the previous two months of deterioration strengthened the Aussie recovery.
- US personal spending data will be the key after GDP signaled weaker spending details.
The AUD/USD pair extends its pullback from 16-week old ascending trend-line by being around 0.7040 during the early Asian session on Monday.
The Aussie pair took advantage of the market reaction to Friday’s GDP data from the US that couldn’t bode well with details suggesting a dip in consumer spending.
Not only US Dollar (USD) weakness, but upbeat numbers from Australia’s largest customer, China, also played well in favor of the latest U-turn. China’s March month industrial profits grew 13.9% after witnessing nearly 14% of decline during the first two months of 209.
Though, the cap on the global risk sentiment could be considered as an upside barrier for the Aussie pair. Global risk barometer, 10-year US treasury yield, dropped more than three basis points to 2.5% at the end of the last week.
While there prevails no major data/events concerning either the US or Australia, today’s US personal spending details will gain higher attention after the GDP figures highlighted sluggish consumer spending.
Today’s announcement of personal spending will be for two months, namely February and March. Also to note is the fact that January month reading grew 0.1%. On the other hand, personal income for March will also be up for release and is bearing +0.4% market consensus versus +0.2% prior.
Technical Analysis
An upward sloping trend-line since January 04, at 0.7000, acts important downside support that holds the gate for the quote’s plunge to 0.6980 and 0.6910 numbers.
On the upside, multiple lows surrounding 0.7050/55 area makes it a tough challenge for buyers to conquer ahead of aiming 50-day simple moving average (SMA) near 0.7105.
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