AUD/USD: a small correction
AUD/USD rose from a 3 1/2-year low at $0.8758 to the levels above $0.8800. Aussie rose as data showed growth in China, the nation’s biggest trading partner, was better than expected.
Analysts at Westpac claimed that it’s “not a bad sign” that Aussie rose slightly on the back of a 0.1 percentage point difference between China’s official Q4 GDP figure of 7.7% and forecast of 7.6%.
“It’s encouraging that there are people willing to buy the Aussie on the upside surprises in key data. But we suspect that the gains will be limited and maybe even unwound because the mood towards the Aussie for the most part is still pretty gloomy.”
Last week the pair formed a big bearish candle. At the same time there’s divergence on the weekly and daily charts. In the near-term resistance is at $0.8830, $0.8866, $0.8889 and $0.8930. Support is at $0.8778, $0.8750, $0.8700. Correction up may extend if Australia CPI due on Wednesday is higher than expected, though analysts currently expect decline.
Chart. Daily AUD/USD