- Upbeat Chinese macro data provided a modest lift to the aussie.
- Improving global risk sentiment remained supportive of the move.
- Concerns over coronavirus kept a lid on any strong follow-through.
The AUD/USD pair quickly retreated around 30-35 pip from five-week tops and was last seen trading with only modest gains, around the 0.6400 round-figure mark.
The pair gained some follow-through traction for the seventh consecutive session and climbed further beyond 50-day SMA following the release of better-than-expected Chinese trade balance figures for the month of March.
Data released this Tuesday showed China’s exports improved in March and fell 6-6% YoY as compared to a 17.2% slide in the previous month. Adding to this, imports reversed the previous month’s decline and rose 2.4% during the reported month.
This comes on the back of a turnaround in the global risk sentiment, which coupled with a subdued US dollar demand provided a goodish lift to the China-proxy Australian dollar and lifted the pair to its highest level since March 12.
The pair touched an intraday high level of 0.6432, albeit lacked any strong follow-through and started retreating from a resistance marked by 61.8% Fibonacci level of the 0.7032-0.5508 downfall, warranting some caution for bulls.
It will now be interesting to see if the pair is able to attract any dip-buying or witness some profit-taking as investors remain cautious on the back of concerns over the negative impact of the coronavirus pandemic on the global economy.
In the absence of any major market-moving economic releases from the US, the broader market risk sentiment might continue to play a key role in influencing the pair’s momentum and produce some short-term trading opportunities.
Technical levels to watch
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