AUD/USD on Recovery Mode Post China's Data Dump

AUD/USD on Recovery Mode Post China's Data Dump

16 May 2016, 04:06
Roberto Jacobs
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AUD/USD on Recovery Mode Post China's Data Dump

AUD/USD has found some strong bids off 0.7250 day lows, recovering and even extending past the opening downside gap, which was a result of poor Chinese data over the weekend. At present, the pair exchanges hands at 0.7280, after hitting a session/day high of 0.7290 (Friday's POC).

Constructive opening in Tokyo

The recovery in risk sentiment, with the 30-year US Treasury yields moving higher in tandem with a surging Nikkei 225 (after a Nikkei report that PM Abe intends to delay, once again, a planned sales tax), together with sticky/macro support at 0.7250, are all factors contributing to the current rise in the Aussie. Strong US data on Friday (retail sales an cons sentiment soared) coupled with Tuesday's upcoming RBA minutes, should cap the upside.

AUD/USD technicals

Technically, Valeria Bednarik, Chief Analyst at FXStreet, notes: "The AUD/USD pair closed lower for a third consecutive week, and moreover, broke below the 50% retracement of this year's rally on Friday, with the bearish trend firmly in place according to the daily technical readings, given that the Momentum indicator hovers near oversold territory, while the RSI indicator presents a bearish slope around 30. The 20 SMA in the mentioned time frame has turned sharply bearish and stands around 0.7540, too far away to be relevant at the time being, but a clear sign of bears' strength."


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