The Australian dollar continues licking its wounds after the excellent US NFP report and it’s holding above 0.70.
Can it recover? Not so fast: things are looking a bit negative. Here are 3 recent negative developments:
- Chinese trade: The economic giant reported a y/y drop in exports and a bigger 18.8% drop in imports for the month of October. Both numbers were worse than expected. The drop in imports means less demand for Australian commodities.
- Chinese inflation: Prices dropped by 0.3% in October and y/y they rose only 1.3%. PPI remains at -5.9%. These disappointment and negative signs also point to a slowdown.
- Australian business confidence: The NAB Business Confidence dropped from 5 to 2 points in Q3. This is not only related to China and also adds to worries.
Next on the agenda we have industrial output from China tomorrow morning and Australian employment figures on Thursday.
AUD/USD is very stable in range: trading at 0.7050 at the time of writing, between 0.70 and 07065. So far, it seems to respect the round level of 0.70. But for how long?
Below, support awaits at 0.6935, which was a double bottom. Higher resistance awaits at 0.7110 and 0.72.
More: AUD: Maxed Out? – Credit Agricole
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