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AUD/USD: China weighing in after Nonfarm Payroll's

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 8, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - AUD/USD is opening early Asia on the offer in a bearish gap with the Chinese news from over the weekend, weighing on the commodity sector's outlook and Global Growth in general.

    The Chinese economy recorded its highest trade surplus on record last month. The Chinese trade balance offered a surplus of $61.4bn for October vs expectations of +$62.0bn while prior was $60.34bn. Exports were -6.9% y/y vs expected -3.2% (prior was -3.7%) while Imports were -18.8% y/y vs expected -15.2% (prior was -20.4%).

    Moreover, the Aussie closed the week in highly negative territory last week, falling over 150 pips on the back of the Nonfarm Payrolls and fell the biggest drop since Black Monday. From the US Nonfarm Payrolls data, the average hourly earnings posted the biggest year-over-year gain since 2009 and increased 0.4% vs the estimated 0.2% and previous 0.0% m/m, up 2.5% over the prev year.

    Dec hike on cards: full employment range achieved

    The headline number for October printed at 271K, smashing the estimate of 180K while the prior number was revised to 137K from 142K. This data is critical in respect of the FOMC meeting's that will be approaching before the year is out and leaves a 70% chance that the Fed will indeed hike.

    AUD/USD levels

    Technically, AUD/USD now trades below the base of the 2 month channel base at 0.7097 while the price has been descending from the 0.7298/0.7385 Fibo retracement, 2014-2015 downtrend.

    With the bearing gap today, there could be some appetite to fill this drop as seen in current price action, but the bears will be eyeing the September 9th low of circa 0.6940 in this environment with S1 at 0.6991 ahead of the target. Beyond there, 0.6905 is a recent low in Sep 2015 ahead of the 0.6774 2004 low.
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