When is the China Trade Balance, and how could it affect AUD/USD?
China Trade Balance overview
Early Monday sees the next iteration of China's Trade Balance and Import/Export figures for December, with the annualized Trade Balance into December expected at $51.53 billion (previous $44.71 billion), fueled by an expected decline in Exports (forecast 3.0%, last 5.4%) offsetting gains in Imports (forecast 5%, last 3%). The US-China tradespat sees growth in China, and most other parts of the world, as tariffs wipe out growth momentum for the world's developed economies, and a continuing Chinese slowdown is seeing continued knock-on effects for other Pacific nations, and the Aussie remains extremely exposed to changes in China's Trade Balance.
How could it affect AUD/USD?
With the Aussie trading into the high side for the new trading week, and pinning near the major 0.7200 handle, Pacific-session investors will be looking for a boost from Chinese trade figures, but should the slowdown from US-China trade spat fallout continue to knock numbers lower than expected, the AUD could see a revival of retreating action, and as FXStreet's own Valeria Bednarik noted:
The pair advanced for an eighth consecutive day, extending its gains above the 61.8% retracement of the December/January decline at 0.7155, a line in the sand now, as bulls will retain control as long as the price remains above it. In the daily chart, the pair is now developing above its 20 and 100 DMA, both lacking directional strength, while the 200 DMA caps the upside around 0.7275. Technical indicators in the mentioned chart continue advancing within positive levels, maintaining the risk skewed to the upside. In the 4 hours chart, the pair offers a neutral-to-positive stance, as technical indicators lack directional strength but hold into positive ground, while the pair trades above all of its moving averages, with the 20 SMA heading firmly up above the larger ones.
AUD/USD analysis: key Chinese and Australian data in the way of a bullish run
About the China Trade Balance
The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.