AUD/USD- Chinese Activity Data Provides Support for Australian Dollar Amid Hopeful Growth Outlook
Short Position
- Look for a bearish reversal on H1 timeframe at $0.6719, $0.6748, or $0.6786.
- Place stop loss 1 pip above the local swing high.
- Move stop loss to break even when the trade is 20 pips in profit.
- Take 50% profit when the price reaches 20 pips, and leave the rest to run.
Long Position
- Look for a bullish reversal on the H1 timeframe at $0.6599 or $0.6553.
- Place stop loss 1 pip below the local swing low.
- Move stop loss to break even when the trade is 20 pips in profit.
- Take 50% profit when the price reaches 20 pips, and leave the rest to run.
The Australian dollar was influenced by Chinese activity data which was positive for the Chinese economy. Notably, fixed asset investment rose to 5.5%, indicating a significant improvement in investments for construction projects. The optimistic tone of the data provided support for the Aussie dollar, as it raised hopes for commodity exports. As China is Australia’s largest importer of commodities, positive growth data from China tends to benefit the pro-growth AUD. The economic calendar is focused solely on US data, with the PPI and retail sales reports for February in the spotlight. It is expected that both reports will show lower figures than previous releases, which could lead to a further weakening of the US dollar if actual numbers match estimates.
Technically, the AUD/USD currency pair has experienced a slow and weak increase in price in recent days. This is due to a disruption in the typical relationship between risk-on (stronger AUD) and risk-off (stronger USD) caused by the US banking crisis. As long as these conditions persist, the price is expected to remain within a wide range without any significant support or resistance levels between $0.6719 and $0.6599. If the price approaches the resistance level at $0.6719, a bearish reversal from that point could present a good opportunity for a short trade entry. However, due to the choppy nature of the price action, it may be more fruitful to look for trading opportunities in other markets.
