AUD/USD – Recovery on China data capped at hourly 50-MA

AUD/USD pair failed to take out the hourly 50-MA level of 0.7560 despite the trio of upbeat China data release - retail sales, industrial production, fixed asset investment

The AUD/USD pair recovered from the low of 0.7542 but failed to take out 0.7560 and was last seen trading around 0.7550.

Rising yields playing spoil sport

Rising long duration bond yields has reduced demand for the high yielding currencies like Aussie dollar and New Zealand dollar. Moreover, both currencies have been major beneficiaries of the hunt for yield amid falling Fed rate hike bets and negative yields in Europe and Japan.

Consequently, the currency pair is not responding the way it usually does to upbeat China data releases. Industrial production bettered estimates to print at 6.3% y/y. Retail sales beat estimates as well.

The currency pair was last seen trading just below 0.7550 levels. The post China data high stands at 0.7561.

AUD/USD Technical Levels

Acceptance above 0.7561 (post China data high) would open doors for 0.76 (hourly 200-MA), above which hourly 100-MA at 0.7620 could be put to test. On the lower side, breach of 0.7536 (Friday’s low) would expose Monday’s low of 0.7494, under which spot could target 200-DMA level of 0.7395.