- AUD/USD finds some support from upbeat Chinese macro data.
- The USD consolidates overnight gains and seemed to cap gains.
- Traders eye second-tier US economic data for a fresh impetus.
The AUD/USD pair failed to capitalize on its intraday uptick of around 20 pips and is currently placed in the neutral territory, around the 0.6900 round-figure mark.
The pair extended the previous session’s pullback from 1-1/2 week tops and lost some additional ground during the Asian session on Friday. The pair slipped back below the very important 200-day SMA but managed to find some support ahead of weekly lows on the back of mostly upbeat Chinese macro releases.
Aussie supported by upbeat Chinese data
Data released this Friday showed that China’s economic growth stood at 6.0% YoY during the fourth quarter of 2019, in line with analysts’ expectations. This marked the slowest GDP growth in over 27 years but was largely negated by stronger-than-anticipated Industrial Production and Retail Sales figures for December.
This comes on the back of the latest optimism over the conclusion of the long-awaited phase one trade deal between the world’s two largest economies and provided a minor lift to the China-proxy Australian dollar. The pair quickly reversed an early dip to the 0.6885 region but lacked any strong follow-through.
The US dollar managed to preserve the overnight gains led by better-than-expected US economic data. This coupled with a goodish pickup in the US Treasury bond yields extended some additional support to the greenback, which eventually turned out to be one of the key factors capping gains for the major.
Hence, it will be prudent to wait for some strong follow-through buying beyond the 0.6920 heavy supply zone before positioning for any further near-term appreciating move. Later during the early North-American session, some second-tier US economic releases will be looked upon for some short-term trading impetus.
Technical levels to watch