AUD/USD extends south run as China data adds to Aussie disappointment

• AUD/USD drops to a four week low after China’s data dump.
• Industrial Production, Retail Sales and Fixed Asset Investment all joined the earlier released downbeat Aussie employment data.
• Risk tone stays sluggish amid trade/political pessimism, Hong Kong unrest.

China’s key statistics add to the AUD/USD pair traders’ disappointment during early Thursday. The quote stretches previous declines, triggered through downbeat Aussie jobs report, while taking rounds to 0.6800.

China’s October month Industrial Production (YoY) rose 4.7% versus 5.4% forecast and 5.8% prior while Retail Sales grew 7.2% against 7.9% expected and 7.8% prior on the yearly basis. Further, Fixed Asset Investment also weakened to 5.2% from 5.4% expected and prior.

October month Australian employment report disappointed Aussie traders earlier during the day as the Employment Change slumped heavily versus +15K forecast to -19K. Also exerting downside pressure were downbeat readings of Unemployment Rate, Participation Rate and Fulltime Employment data.

Trade sentiment remains under pressure as the US-China trade deal stalemate joins the latest tension surrounding Taiwan, as noted by the Global Times. Additionally, the fourth consecutive day of Hong Kong protests weighs on the market’s risk-tone.

That said, the US 10-year treasury yields seesaw around 1.90% while S&P 500 Futures cheer expectations of further monetary policy easing from global central banks, based on the recently downbeat data.

Although the Asian economic calendar turns lighter now, the second testimony from the Federal Reserve (Fed) Chairman Jerome Powell will be the key to watch during the later part of the day. The Fed Chair repeated the previous comments during his initial appearance on Wednesday.

Technical Analysis

Multiple stops since late-September portray 0.6805/0.6800 as the key support zone, a break of which could drag the pair to 0.6770. On the contrary, the pair’s pullback needs to cross 100-day Exponential Moving Average (EMA) level of 0.6855 in order to aim for 0.6900 mark.