Saturday, April 21, 2018
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AUD/USD freezes on China Trade Balance miss
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  • The Aussie is second-guessing early Friday’s bullish action on China Trade Balance figures.
  • Risk appetite is heading into the later Friday sessions on a high note, but headwinds remain in the broader markets.

The Aussie is hesitating on China trade data, spinning near 0.7770.

The Aussie saw a bullish push upwards as risk sentiment recovers from the week’s Syria missile fiasco, and traders have managed to maintain their risk appetite as the US floats further tariffs against China. The Reserve Bank of Australia (RBA) Financial Stability Report earlier perfectly highlighted the bearish twist that is now facing the Aussie in the Asia trading session with China’s trade balance figures missing the mark, with the Trade Balance for March printing a -4.98 billion (in USD terms), a clear miss of the $27.21 billion surplus that was expected, and a wider swing from the $33.75 billion previous figure.

China’s March trade data (CNY): shows deficit on exports slump

Stated in the Financial Stability Report earlier: “Concerns about riskier types of new housing borrowing have eased and most aggregate indicators of financial stress remain low,” the RBA said. However, the central bank took note of the risks to the Australian economy from China.

RBA FSR: Risks to Australia economy from China remain elevated

AUD/USD Levels to watch

The China Trade Balance miss is a knock-on effect for the Aussie and the bearish action is of limited scope, and the technical outlook for the Aussie from earlier remains in play, As noted by FXStreet’s own Omkar Godbole, “A break above 0.7783 (descending 50-day MA) would expose the 200-day MA lined up at 0.7813 and 0.7835 (falling channel resistance). On the downside, a violation at 0.7751 (session low) could yield a pullback to 0.7712 (March 1 low) and 0.77 (psychological support).”


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