“¢ Investors looked past today’s mixed Chinese macroeconomic releases.
“¢ Subdued USD demand helps regain positive traction for the fifth straight session.
“¢ Traders now look forward to the US monthly retail sales data for fresh impetus.
The AUD/USD pair quickly reversed an early dip to an intraday low level of 0.7177 and is now looking to extend the momentum further beyond the 0.7200 handle.
On Thursday, the pair built on this week’s goodish recovery move from 30-month lows but the momentum fizzled out near the 0.7230-35 supply zone after the US President Donald Trump dampened market optimism over the possibility of renewed trade talks.
The pair extended overnight retracement slide and was further weighed down by today’s mixed Chinese data dump, especially an unexpected record low fixed investment growth, which exerted some additional downward pressure on the China-proxy Australian Dollar.
However, a softer tone surrounding the US Dollar, undermined by Thursday’s release of softer US consumer inflation figures, partly offset weaker copper prices and helped the pair turn higher for the fifth consecutive session.
It would now be interesting to see if the pair is able to build on the positive momentum or continues with its struggle to make it through the 0.7230-35 immediate barrier as the focus now shifts to the release of US monthly retail sales data.
This coupled with the prelim UoM US consumer sentiment index will be looked upon to grab some meaningful trading opportunities on the last trading day of the week.
Technical levels to watch
On a sustained move beyond the 0.7230-35 resistance zone, the pair is likely to aim towards reclaiming the 0.7300 handle before heading towards 50-day SMA hurdle near the 0.7320-25 region.
On the flip side, the 0.7180-70 region might continue to protect the immediate downside, which if broken is likely to accelerate the fall back towards 0.7140-35 horizontal support.
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