- AUD/USD is treading water in early trade although Chinese trade figures could induce volatility later.
- The Australian Index ASX 200 is looking to edge lower adding to losses from the previous two sessions
- Hong Kong’s Hang Seng Index looks for support at 24,500. Meanwhile US markets are closed in observance of Labour Day.
AUD/USD:
Chinese Import & Export data will be in focus for Australian Dollar traders as they look for further insight into the health of the world’s second largest economy. The data is important for Aussie Dollar trades because AUD is considered a proxy for China.
Expectations are for a 7.5% jump in exports and a 0.2% increase in imports compared to the same month a year ago. A better-than forecast print could boost the Australian Dollar, whilst a downbeat number could send the commodity linked currency southwards.
Given the US public holiday today, Asia Pacific currencies could see reduced liquidity making them more vulnerable to big moves and increased volatility, particularly in the event of data surprises either to the upside of the downside.
Technically, after striking the upper band of the Bollinger band last week, the AUD/USD has pulled back to its 20-Day Simple Moving Average (SMA) at 0.7253, which now acts as a support. Meanwhile the 50 & 100 SMAs continue to indicate that the broad trend for the pair is bullish. Strong resistance can be seen at 0.7390 – which is also the 200% Fibonacci extension level. Given the strength of this resistance level it could well take a strong positive catalyst to break through it.