Bullish View
Set a buy stop at 0.7800 and a take-profit at 0.7850.
Add a stop loss at 0.7700.
Bearish View
Set a sell-stop at 0.7720 (Friday’s low)
Add a take-profit at 0.7650 and a stop loss at 0.7760.
The AUD/USD pair is in a tight range after the relatively strong economic data from China. The pair is trading at 0.7748, which is 0.65% below last week’s high of 0.7800.
Strong Chinese Data
Australia has benefited greatly from its close proximity to China over the decades. China buys most of its natural resources like iron ore, coal, and copper. It also buys a lot of its services like tourism and education.
Recent economic numbers from China have been highly supportive of the Australian economy. Last week, data revealed that China’s exports and imports had rebounded in February leading to a record surplus of more than $100 billion.
Today, data by the statistics agency revealed that the country’s retail sales jumped from 7.3% in January to 35.1% in February. This performance was better than the expected increase of 32.0%. It was mostly because of the week-long lunar new year where most people in China travel and boost their spending.
Further data revealed that industrial production increased from 7.3% to 35.1% while fixed asset investments increased from 2.9% to 35.0%. The unemployment rate rose from 5.2% to 5.5%. In general, the strong performance of the Chinese economy will continue, helped by the recent $1.9 trillion stimulus package.
Tomorrow, the AUD/USD will react to the latest House Price Index and the latest Reserve Bank of Australia (RBA) minutes.
AUD/USD Technical Forecast
The AUD/USD is wavering at the 0.7748 range. It is slightly below Friday’s high of 0.7800 and is along the 25-day and 15-day exponential moving averages (EMA). It is also slightly above the 61.8% Fibonacci retracement level while the two lines of the MACD are struggling above the neutral line.
Still, the price is in a short-term upward trend that started on March 9, when it declined to 0.7616. Therefore, the price may rebound as bulls target the 38.2% retracement level at 0.7835. However, a decline below the 23.6% retracement level at 0.7730 will invalidate the bearish thesis.
