FXstreet.com (Barcelona) – The AUD/USD is int he process of printing a sizeable bearish outside candle on lower time frames after an initial spike to 1.0210 on China’s trade surplus numbers was greeted by strong selling pressure, sending the rate as cheap as 1.0184.
Looking at the hourly chart, demand is expected at 1.0175/80 – July 9 sequene of lows – ahead of 1.0150 – July 9 swing low – , followed by 1.0120. Since breaking below 1.0200 on July 6, today marks the thrid topside failure for the Aussie to regain the level, indicative that sellers may be no longer on the backfoot.
China’s trade surplus widened to $31.7 billion in June from $18.7 billion in May, however, looking detail by detail, figures suggests that downtrend in export orders means loss of momentum.
According to Michael McDonough, Researcher at Bloomberg: “While exports came in slightly better than forecast, a steep decline to 47.5 from 50.4 in New Export Orders suggests a sharp drop ahead. Meanwhile, weak Chinese import growth (6.3%)—signifying the domestic sector is still slowing—likely provided the impetus for the recent rate cut.”