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AUD/USD - Post-RBA sell-off stalled around 61.8% Fib, eyes China trade data

  • 61.8% Fib again caps losses in the AUD/USD pair.
  • Weakness in the treasury yields helps the pair regain some poise.

The post-RBA sell-off in the AUD/USD ran out of steam around 0.7632 (61.8% Fib R of May/Sep rally) as the 10-year treasury yield dropped to a three-week low of 2.3 percent.

As of writing, the currency pair is trading around 0.7650 levels.

Focus on China data

China Oct. trade data due at 02:00 GMT is expected to show the trade surplus in USD terms widened to $39.50 billion vs. previous $28.61 billion. In CNY terms, the trade surplus is seen rising to 275 billion from 193 billion.

A better-than-expected trade surplus could strengthen the AUD, although sustained gains are more likely if China reports a pick up in the imports of commodities like iron ore and copper.

Also, the exchange rate is likely to track the 10-year AU-US bond yield differential, which currently hovers around 27 basis points.

AUD/USD Technical Levels

Jim Langlands from FX Charts writes - "while the short term momentum indicators look mildly supportive for a possible squeeze up towards 0.7665/75, the longer term charts look heavy and a break of 0.7625 would bring fresh selling, which could then see a run towards 0.7600 and eventually to 0.7570. Direction today will come from the China Trade Balance although there is little out apart from that and it may be a day of consolidation within the 0.7625/80 area."

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