Originally published by AxiTrader
Yesterday's retail sales result in Australia was solid. And while it took a little while for the market to recognise that it was a really good number, the Aussie dollar caught a bid and traded higher.
All that ended though with the release of the Chinese tariffs which ignited the market funk that gripped trade for a few hours before US markets shook off the bear suit and headed higher.
The washup is that after a low around 0.7664 the AUD/USD is this morning sitting nicely back above the 77 cent region it topped after retail sales at 0.7722 this morning.
So the natural question is whether it is now time to buy the Aussie dollar?
That’s the question I’m asking myself this morning along with a similar one for the kiwi. I say that because the antipodean pair just won’t go down. Of course, they are essentially hostage to the US dollar which hasn’t been much of a beneficiary of the many positives that have accrued to it including growth and interest rate differentials. And of course, when it does the Aussie and Kiwi – along with the other majors – are likely to come in for a belting. And and of course that could come as soon as tomorrow night if the data remains strong or if there is a hint of rising wages.
But right here and right now at 0.7722 the Australian dollar is doing relatively well and has built a base of support in the 0.7640/60 region which would need to break to open up the down side.
That’s solid for the moment so a topside probe toward 0.7760/70, perhaps back to the 200 day moving average at 0.7808 may be on the cards. But all this is still possible within the current downtrend.
We have trade data here in Australia which could be interesting for the Aussie dollar traders. The market is looking for a surplus of $700 million for February. The Services PMI for Australia is also out this morning.
Here's the chart:
Have a great day's trading.