Australia's largest trade partner, China , released improved Retail Sales and industrial Production for the month of October, providing a boost to the Aussie and to overall market sentiment.
As such, it extends Friday's rebound past 0.7341, which marks the 23.6% Fibonacci of the October High/November low drop. This can lead to a larger correction towards the 38.2% Fibonacci but this area poses a strong resistance as EMA200 sits just a little higher (0.7382-95). Sustained risk on mood and/or positive catalyst will be need for further gains.
Despite today's upbeat sentiment, AUD/USD had taken a double hit last week from increased Australian Unemployment and hot US Inflation, while central bank divergence remains unfavorable.
Current levels may spark fresh selling pressure and knock it back below 0.7322-17, which will keep the risk for new month low on (0.7275-64).
Amidst lack of catalysts, the pair's trajectory will likely be determined by broader investor sentiment, but on Tuesday, we expect RBA's minutes and speech by its governor.
Past Performance: Past Performance is not an indicator of future results.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.