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AUD/USD: Sellers keep lurking around 0.7100

3/18/2019, 2:19:52 PMMarket Analysis
AUD/USD: Sellers keep lurking around 0.7100

The AUD/USD pair trades near 0.7080 at the initial Asian sessions on Monday. Having failed to cross 0.7100 round-figure during last week's recovery, the quote seems to find it hard to confront downbeat reports from the US-China trade front. However, China’s pledge to keep supporting growth and the US Dollar (USD) weakness is likely limiting the pair’s downside.

The Australian Dollar (AUD) has recently benefited from the USD’s decline despite sustained weakness in China’s headline data. The January month industrial production from China dropped to nearly a decade low with 5.3% growth versus 5.5% market consensus and 5.7% prior.

The much-anticipated reason for the AUD/USD pair’s strength is likely decline of the USD due to soft data and market’s risk-off sentiment. Headline statistics from the US like retail sales, consumer price index (CPI) and industrial production all registered soft figures during last-week and favored the US Dollar’s decline at a time when Brexit uncertainties were pushing investors to safe-havens.

Reports concerning the trade deal between the US and China were also rising after criticism of China’s human rights violation by the US lawmakers and a question mark on the final trade meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping. However, China’s pledges to support growth at a press conference to end the National People’s Congress meeting pleased Aussie traders off-late.

Aussie traders may now look forward to developments surrounding the US-China trade deal in order to determine near-term market moves as lack of data confines catalysts.

AUD/USD Technical Analysis

Repeated failures to surpass 0.7100 during last-week highlight the weakness in trade sentiment that can drag the quote back to 0.7050-45 and 0.7015 supports.

Meanwhile, an upside clearance of 0.7100 needs to break a descending resistance-line from January-end, at 0.7130, to challenge 100-day simple moving average around 0.7160.