AUD/USD: On the road to recovery near 0.6970 ahead of Aussie trade balance
- The US Dollar (USD) recovery and sluggish Aussie GDP triggered the previous pullback.
- Greenback again under pressure as trade worries are on the spotlight.
- Australian trade balance data will be followed for fresh impulse.
While global markets are busy concentrating on the US-Mexico talk output, the AUD/USD pair silently recovers latest losses as it is on the bids around 0.6970 during the initial Asian session on Thursday.
With the sluggish Australian GDP providing additional strength to expectations of yet another rate cut from the Reserve Bank of Australia (RBA), the Aussie pair dropped on Wednesday.
The US Dollar’s (USD) across the board gains, on the back of upbeat ISM non-manufacturing PMI, could also be considered as a reason for the yesterday’s pullback of the pair.
News reports were also on wires that China was behind Saudi Arabia’s latest missile attack, as per the US intelligence report, which in turn can escalate macro worries surrounding the relationship between the world’s two largest economies, namely the US and China.
Global risk tone failed to hold the latest recovery as the US 10-year treasury yield sticks to 2.131% by the press time.
Having witnessed soft GDP numbers, traders may now give higher emphasis to Australian trade statistics for April, up for release at 01:30 GMT. The forecast suggests that the trade balance could increase to 5,100 million from 4,949 million while the exports and imports both registered -2.0% mark previously during March month.
On the other hand, the US trade balance for April is also scheduled for publishing during the day and is likely to register higher deficit figure of $-50.7 billion against -$50.0 billion prior.
Technical Analysis
Considering the pair’s latest U-turn and recent patterns of data disappointments from Australia, 0.6940 and 0.6900 supports gain higher market attention than the immediate resistance of 50-day simple moving average (SMA) surrounding 0.7030. Should the quote slips under 0.6900, 0.6860 and January 2016 low near 0.6830/25 can flash on bears’ list while an upside clearance of 0.7030 can recall late-April month high near 0.7070 back to the chart.