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China Trade Balance overview

China’s latest Trade Balance figures for the month of September are expected sometime early Friday between 02:30 GMT and 03:30 GMT, with no set exact release time making it difficult for Pacific-Asia session traders to gear themselves up ahead of the trade data reading. The still-brewing trade war between the US and China is feared to begin taking a larger toll on China’s domestic economy, which relies heavily on both external demand and internal consumption to maintain growth, and with China representing Australia’s largest trading partner, knock-on effects for the AUD could be severe if fear-prone investors see further reason to flee into safety on sluggish Chinese trade numbers.  

China’s overall Trade Balance for September (in USD terms) is expected to decline to 19.40 billion, compared to the previous month’s reading of 27.89 billion, with an expected contraction in both Exports (forecast 8.9%, previous 9.8%) and Imports (forecast 15.0%, previous 19.9%) fueling the anticipated shortcomings.

How could it affect the AUD/USD?

The Aussie has been trapped in a rough range for most of the week as broader markets remain concerned about bigger fish frying, but the Friday Asian session leaves the Aussie entirely exposed to China data after the AUD/USD barely registered domestic data and statements from the Reserve Bank of Australia (RBA), with all AUD traders keeping their eyes open for China; that being said, there’s ample opportunity for Aussie bulls to take a step up and crack the week’s upper boundary, provided that China data doesn’t expectations too drastically, and as FXStreet’s own Valeria Bednarik noted:  “the pair could be developing a double bottom at 0.7040 with the neckline of the figure being this week high of 0.7130. The short-term picture leans the risk toward the upside, as the pair recovered above the 23.6% retracement of its latest decline, now the immediate support at 0.7085, while the Momentum indicator bounced from its 100 level, as the RSI consolidates around 52. Struggling with the 0.7100, a more solid advance could be expected on a break above 0.7140, the 50% retracement of the mentioned decline.”

Support levels: 0.7085 0.7040 0.7010  

Resistance levels: 0.7140 0.7175 0.7200

Key notes

AUD range bound ahead of key US currency report

AUD/USD Forecast: trapped between USD weakness and nose-diving equities

AUDUSD Outlook: Extended sideways mode between 0.7042 base and falling 10SMA

About the China Trade 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.

About China Imports

Imports of goods and services, released by National Bureau Statistics of China, consist of transactions in goods and services (sales, barter, gifts or grants) from non-residents to residents.

About China Exports

Exports of goods and services, released by National Bureau Statistics of China, consist of transactions in goods and services (sales, barter, gifts or grants) from residents to non-residents.