AUD/USD muted reaction to Chinese trade balance data

Extending its reversal from a two-month high level of 0.7658 touched on Tuesday, the AUD/USD pair dropped below 0.7600 but held steady around 0.7580-90 band after the release of Chinese trade balance data.

According to the data released a short while ago, Chinese trade balance for the month of June showed a surplus of 311 billion, down from May’s surplus of 325 billion. The surplus was lower than consensus estimate of 320 billion. 

The pair had a muted reaction to the data as BOE monetary policy decision on Thursday remains this week’s key even risk. BOE decision has the potential to shaken the prevalent risk sentiment across global financial markets. 

Moreover, investors will also look forward to the key Chinese GDP data for the second quarter of 2016 in order to determine the pair’s near-term direction. Being Australia's largest trading partner, Chinese economic data has a lasting effect on the Australian Dollar. 

Technical levels to watch

Sustained weakness below 0.7570 immediate support would continue attracting fresh offers, which has the potential to drag the pair towards 100-day SMA support near 0.7465-60 region. Intermediate support on the downside is pegged around 0.7500 psychological mark.

On the flip side, momentum above 0.7630 resistance should lift the pair immediately towards 0.7670 resistance before the pair aim towards its next important resistance near 0.7745-50 area.