China reports astonishing imports, and it sends the AUD/USD higher
InvestingOnline.com
8/08/2018, 03:57China reported a $28.05 billion surplus in its trade balance for July, according to the General Administration of Customs of the People’s Republic of China. The number is weaker than expected as strong imports took the highlights.
According to the official report, imports in USD terms rose 27.3%, well above the 16.2% expected by market and an acceleration from the 14.1% increase reported in June.
Exports in China rose 12.2% in July, above the 10% increase expected by market, and better than the revised 11.2% figure of June.
In total, trade balance in China showed a surplus of 28.05 billion dollars in July, below the 39.33 billion dollars expected and well below the 41.47 billion reported in June.
AUD/USD trades higher and tests the 50-day moving average
AUDUSD daily chart August 7
The Australian dollar is trading higher in Tuesday against its American counterpart as investors are digesting China trade balance data and remarks from RBA governor Lowe.
In a recent speech, RBA Governor Philip Lowe said that the RBA board sees no strong case for a near-term rate move. He said that next rate move is likely to be up if economy evolves as expected.
Lowe said the RBA expects inflation to rise close to 2.5% in 2020. Unemployment rate to reach 5% level over the next few years, while wages are picking up in pockets of the labor market, and a broader rise will be gradual.
The AUD/USD close Tuesday with gains as the pair rose from 0.7380 to break above the 20-day moving average at 0.7400 and it tested the 50-day moving average at 0.7445.
On Wednesday, the AUD/USD is currently trading 0.16% positive on the day at 0.7431. The cross looks ready to test the 50-day MA again.
Technically, the mentioned 50-day moving average has been containing the upside move for the AUD/USD since February 21. To the upside, if the pair breaks above the 50-day moving average, it will find next resistances at 0.7460.
Then, investors should look selling zones at 0.7485 and 0.7600.
To the downside, a rejection of the 50-day moving average would send the pair to test the 0.7350 area first, and then the 0.7315 critical support.
