AUD/USD RECOVERY GATHERS PACE FOLLOWING UPBEAT CHINA DATA, DISMAL U.S. RETAIL SALES
The near-term recovery in the Australian dollar appears to be gathering pace, with AUD/USD on track to test the February-high (0.7989) as it extends the series of higher highs & lows from earlier this week.
Fresh data prints coming out of the global economy has propped up AUD/USD as industrial outputs in China, Australia’s largest trading partner, expands an annualized 7.2% in February, while U.S. Retail Sales unexpectedly contracts 0.1% during the same period. With China targeting a growth rate of 6.5% in 2018, the ongoing expansion in the Asia/Pacific region may put pressure on the Reserve Bank of Australia (RBA) to alter the outlook for monetary policy, but Governor Philip Lowe and Co. seem to be in no rush to implement higher borrowing-costs as ‘household incomes are growing slowly and debt levels are high.’
As a result, the RBA may merely attempt to buy more time at the next meeting on April 3, with AUD/USD at risk of facing range-bound conditions over the near-term should the central bank tame expectations for an imminent rate-hike. Nevertheless, the near-term outlook for AUD/USD remains constructive following the series of failed attempts to close below the 0.7720 (23.6% retracement) to 0.7770 (61.8% expansion) region, with the pair facing a key test over the coming days as it quickly comes up against the topside hurdles.
AUD/USD DAILY CHART