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AUD/USD ignores unimpressive Chinese trade balance

China, the world’s second-largest economy, has released another set of disappointing trade data. Australia’s No. 1 trade partner  had a drop of 4.4% in exports year over year in July. A slide of 3.5% was expected, but at least it is better than 4.8% seen beforehand.

The more disappointing data point for Australia is a deep dive in imports: 12.5% y/y against  7% expected and 8.4% previously. Australia exports iron ore and other metals to China. The fall does not bode well for Australia’s mining sector.

The Chinese economy is transitioning away from industry and investment towards consumption and services. However, this is a long process. Also, Australia is moving away from its reliance on  extracting metals and the big client to other industries, and also here, the shift is gradual.

Nevertheless, the  Chinese publication did not seem to hurt the Aussie too much. AUD/USD did wobble in range but  did not fall. Perhaps the impact of China on Australia is waning. The RBA cut interest rates but signalled that no new moves are coming in the near future. We still have more data coming out from China this week, namely industrial  output.

Aussie/USD is currently trading at 0.7628,  moving up within the range.Support  awaits at 0.76 and resistance at 0.7640.  A further cap awaits at 0.7660.

More:  Elliott Wave Analysis on AUDUSD and GBPUSD

Here is the AUD/USD chart.

AUDUSD August 8 2016 up despite Chinese trade

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.