AUD/USD drops 10 pips despite upbeat China data

• AUD/USD sheds 10 pips despite better-than-expected China trade data.
• China's export growth bettered estimates, the trade surplus came in at $45.06 billion.

A better-than-expected China data released soon before press time has failed to put a bid under the AUD/USD.

The currency pair is currently trading at 0.6772, having hit a high of 0.6782 just before the release of China data.  

China's trade surplus bettered estimates

China's trade surplus narrowed to $45.06 billion in June from May's print of $50.98 billion but bettered the forecasted figure of $40.00 billion.

Exports or outbound shipments rose 3.3% year-on-year in US Dollar terms, beating the expected drop of 2% by a big margin. Meanwhile, imports fell 5.6% year-on-year compared to an expected drop of 8.3 percent.

So far, however, the uptick in trade surplus and the above-forecast export growth has done little to boost the demand for the Aussie dollar, a proxy for China.

Technically speaking, the pair looks due for a stronger corrective bounce, having carved out a long-tailed Doji candle yesterday.

The pair had dropped to a 10-year low of 0.6746 yesterday as a bigger-than-expected rate cut by the Reserve Bank of New Zealand bolstered expectations of aggressive easing by the Reserve Bank of Australia before the year-end. However, by day's end, the spot rose back to 0.6756, leaving a long-tailed Doji candle in its wake, a sign of seller exhaustion.

Pivot points