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Aussie consolidates in narrow range above 0.9600

FXstreet.com (Barcelona) - The Aussie has started the week off on a strong note, gapping up 40 pips and consolidating just above the 0.9600 area after better than expected economic data out of China hit the wires over the weekend.

According to analysts at NAB Global, “regional data since Friday has been better. While early days, Japan’s economy recorded a second monthly rise in core inflation, improved manufacturing with a pick-up in the PMI and industrial production. India’s economy picked up a little in Q1 to a 4.8% pace. Then over the weekend, China’s official picked up to 50.8 from 50.6, pointing to further growth. The AUD/USD was on the selling end of USD strength Friday night though it stabilised late in the session as US stocks reversed. It’s opened 40 pips higher first thing this morning in the wake of the weekend China manufacturing data.”

The FXStreet.com Trend Index remains slightly bearish on the daily chart, while the OB/OS index remains oversold. Initial resistance sits at 0.9644 (the 9dma), followed by 0.9750 (previous support, now resistance on daily chart). Initial support sits at 0.9548 (previous day low), followed by 0.9500. The RSI (14) continues to show numerous bullish divergences on the daily chart, which may help spark some short covering as we head into the new week.

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