- The Aussie dollar is flashing green above 0.71.
- Australia trade deficit widened more than expected in September. The import price index for the third quarter also bettered estimates.
- The upbeat data bolsters the bullish divergence of stochastic and RSI on the daily chart.
The bid tone around the Aussie dollar strengthened after the Australian Bureau of Statistics reported an above-forecast September trade surplus.
The exports rose 1 percent in September and the imports dropped by 1 percent, pushing the trade surplus higher to AUD 3,017 million from the August reading of AUD 1,604 million. The markets were expected the surplus to print at AUD 1,700 million.
Further, the imported inflation rose 1.9 percent quarter-on-quarter in Q3, bettering the forecasted figure of 1 percent by a wide margin. Meanwhile, the export price index rose 3.7 percent quarter-on-quarter following a 1.9 percent reading in the previous quarter.
The Aussie dollar jumped more than 20 pips to a session high of 0.7113 in response to upbeat economic data and is currently trading at 0.7108. The bullish divergence of the RSI and Stochastic, seen in the daily chart, indicates the currency pair could rise to 0.7164 (50-day EMA) in a day or two.
Technical Levels
Resistance: 0.7160 (Oct. 17 high), 0.7164 (50-day EMA + falling trendline January highs), 0.7202 (Aug. 15 low)
Support: 0.7053 (Tuesday’s low), 0.7021 (Friday’s low), 0.70 (psychological support)
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