China Trade Balance overview
China’s latest Trade Balance readings, expected sometime around 02:30 GMT, are expected to contract again under pressure from the US-China trade war, and tariffs on Chinese goods and retaliation from China on US goods are expected to send China’s balance of trade (in USD terms) back to $39.22 billion compared to the previous period’s $41.47 billion.
How could it affect the AUD/USD?
The Aussie has seen consolidation for eight straight weeks, and as FXStreet’s own Valeria Bednarik noted, downward potential is looking capped on the technical readings, and a disappointing reading for China trade figures could see the Aussie continue to trade into consolidation: “the pair holds at the upper end of its usual range, but the upward momentum faded, as usual lately when it nears the 0.7440/50 region. In the 4 hours chart, the price is well above its moving averages, with the 20 SMA heading north below the larger ones, while technical indicators retreated from nearly overbought readings, holding so far in positive levels, somehow indicating a limited downward potential. As commented on previous updates, the pair would need to surpass 0.7483, July’s high, to become more attractive to bulls.”
Support levels: 0.7400 0.7370 0.7330
Resistance levels: 0.7445 0.7485 0.7520
Key notes
AUD/USD analysis: hurdle of Chinese data to affect the Aussie
AUD pushes back through 0.74 as Yuan finds support
About the China Trace Balance
The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.
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