AUD/USD price rose after relatively weak Chinese economic data. According to the National Bureau of Statistics (NBS), retail sales fell 0.5% in October, while industrial production and fixed asset investment fell 5.0% and 5.8%, respectively.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6700.
- Add a stop-loss at 0.6900.
- Lead time: 1-2 days.
Bullish view
- Set a buy-stop at 0.6820 and a take-profit at 0.6920.
- Add a stop-loss at 0.6725.
The rise in AUD/USD prices accelerated after another round of positive US inflation data and the meeting between Xi Jinping and Anthony Albanese. It hit a high of 0.6793, the highest level since September.
Meeting Xi Jinping and Albanians
AUD/USD welcomed the meeting between Australian and Chinese leaders at the G20 meeting in Indonesia. The meeting was aimed at easing tensions between the two countries, which deal in goods worth billions of dollars each year.
This crisis began when Australia joined other Western countries in banning Huawei from its 5G network in 2020. It accelerated when Australia joined other Western countries in seeking responses to the Covid-19 pandemic.
In the aftermath, China announced a series of sanctions and tariffs on some of Australia’s main exports like wine, coal, beef, lamb and iron ore. Consequently, the AUD/USD price rallied as investors predicted that these talks would lead to a reset in the relationship.
The two leaders agreed on the need to continue the dialogue in the future. However, it is still unclear whether the two countries will resume normal trade relations in the short term.
AUD/USD price rose after relatively weak Chinese economic data. According to the National Bureau of Statistics (NBS), retail sales fell 0.5% in October, while industrial production and fixed asset investment fell 5.0% and 5.8%, respectively.
The pair also rose after another round of US inflation data. According to the Bureau of Labor Statistics (BLS), the producer price index rose from 8.4% in September to 8.0% in October. The Core PPI, which excludes volatile items, fell from 7.1% to 6.7%.
The figures came a week after the United States released encouraging data on consumer inflation. Therefore, most analysts expect the Federal Reserve to begin its pivot at the next meeting.
AUD/USD Forecast
The AUD/USD price has been in a strong uptrend over the past few weeks. It accelerated after the price broke above the important resistance level at 0.6518, the neckline of the reverse head and shoulders pattern.
The pair also rallied above the 25- and 50-day moving averages, while the Stochastic oscillator moved above the overbought level. The RSI has also reached the overbought point.
Therefore, the pair is likely to have a brief short-term pullback on profit taking. This pullback could take it down to around 0.6600.
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