By George Hopkinson
The AUDUSD continues its recovery from the bout of negative domestic data releases last week that included the CPI read that disappointed the market. The AUD slipped 1% against the greenback and has struggled ever since, including a brief stint below 0.7000.
AUD PPI on Friday did not help the struggling Aussie, however, the US GDP data and coupled with the upbeat numbers from China, also played well in favour of the latest U-turn. China’s March month industrial profits grew 13.9% after witnessing nearly 14% of decline during the first two months of 2019.
Though, the cap on the global risk sentiment could be considered as an upside barrier for the Aussie pair. Global risk barometer, 10-year US treasury yield, dropped more than three basis points to 2.5% at the end of the last week.
While there prevails no major data/events concerning either the US or Australia, today’s US personal spending details will gain higher attention after the GDP figures highlighted sluggish consumer spending.
Upcoming this week, domestic consumer confidence is released tomorrow with various US data and news throughout. The FOMC rate announcement is Thursday with Employment data towards the end of the week. Japan is also enjoying ‘Golden Week’ which is a week of holidays in Japan to celebrate Emperor Showa. We are expecting a potential reduction in FX market liquidity which could lead to fast movements in Asian currency pair; including the AUDUSD cross.
On the technical side, Australian Importers should be looking to the resistance level of 0.7050 as a bellwether to any respite from the recent dip.
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