- China iron ore imports increased by 15.7 million tonnes in January.
- Yuan-denominated trade surplus narrowed to 135.8 billion.
- AUD/USD pays no heed to China data release.
China imported 100 million tonnes of iron ore in January, compared to 84.3 million tonnes in December, customs data show. Arrivals were 94.54 million tonnes in November.
However, the Aussie dollar is not impressed. As of writing, the AUD/USD is trading at 0.7825 – levels seen before the release of China trade data. Iron ore along with copper is one of Australia’s top exports.
A drop in China’s overall trade surplus could be keeping the AUD bulls at bay. Also worth noting is the slight decline in China’s copper imports. The world’s largest consumer of commodities imported 440,000 tonnes of unwrought copper in January, compared to 450,000 tonnes in December.
Looking ahead – the pair could be influenced by the action in the AU-US 10-year bond yield spread. The Aussie dollar could drop below 0.78 if the spread turns negative inversion) and equities see sharp losses.
AUD/USD Technical Levels
Chief Analyst Valeria Bednarik writes, “the bearish tone persists according to technical readings in the 4 hours chart, as the 20 SMA continues heading lower above the current level, now converging with a Fibonacci resistance at 0.7890, while technical indicators turned sharply lower within negative territory, with no signs of changing course. Renewed selling pressure below 0.7820 should signal a downward continuation for this Thursday.”
Support levels: 0.7820 0.7795 0.7750
Resistance levels: 0.7850 0.7890 0.7925