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Weaker Trade Data Drags AUD/USD Lower

AUD

Weak trade data from Australia sees AUD/USD pull back. The pair last down 9 pips at 0.7793 after rising as high as 0.7817 pre-data.

  • The November trade surplus fell to AUD 5.02bn from AUD 7.456bn. The drop in surplus was driven by a 10% rise in imports (est. 3%) vs a 3% rise in exports (est. -2%). This is a broadly negative picture given that iron ore has likely boosted exports while domestic demand could slip in December due to lockdowns.
  • China tops the list of trading partners, though tensions between the 2 nations have escalated recently which could impact exports.
  • Building approvals rose 2.6%, above expectations of a 2% gain. Private sector house approvals rose 6.1% against estimates of 2%.
  • There could be some headwinds for the pair from a technical perspective; weekly stochastics move further into overbought territory. Immediate intraday resistance as yesterday's high of 0.7820, more significant resistance at 0.7885 March 15 2018 high and 0.7917, March 14 2018 high. Immediate intraday support at 0.7762, yesterday's low.

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