Chinese Trade Balance data was released over the w/e and the headline figure has come in much better than expected. However, as Forex Live points out, teasing this data out shows that imports fell more than exports and this ‘import’ softness suggests global demand is weak which is not such good economic news. Just how the AUD$ reacts to this data at market open remains to be seen but this is how I’m seeing the charts as at the w/e.
AUD/USD monthly: the monthly chart shows price conforming to a monthly triangle pattern BUT under an extra bear trend line since mid 2013:
AUD/USD weekly: the weekly chart shows this extra bear trend line coinciding with the key 0.80 S/R region. Any bullish take on the Chinese data could bring this 0.80 S/R back into focus:
AUD/USD daily: price action had been on a bullish run but, with recent US$ strength, this momentum waned and the support trend line was broken. Price action has currently retraced to the 50% fib but could just as easily bounce from here, so, some caution is required. Any focus on the headline CNY data would support a bounce from this technical support level:
AUD/USD 4hr: this chart shows that price has pulled back to the 50% fib of the recent swing high move and has also closed the week below 0.74 support. Any close and hold back above this 0.74, especially if the markets focus on the headline part of the CNY data, could underpin bullish continuation. Any focus on the import softness aspect of the CNY data though could help take the A/U below the 50% fib and this would then support bearish continuation. Thus, watch how price reacts to the data at market open and how it moves from this 50% fib and 0.74 region:
Ichimoku Cloud: price action is below the 4hr Cloud but IN the daily Cloud so further choppiness at these levels could be expected:
AUD/USD Daily Ichimoku Cloud: in the Cloud supporting choppiness:
AUD/USD 4hr Ichimoku Cloud: below the Cloud which is bearish:
Summary: the AUD/USD is currently sitting at the 50% fib of a recent swing high move and this fib is near the 0.74 S/R level. This 50% fib & 0.74 region is the one to watch at market open to gauge whether the Chinese Trade Balance data is rejoiced or feared.