Australian Dollar, China Trade Balance, AUD/USD, AUD/JPY, AUD/CHF – Talking Points:
- The Australian Dollar may be at risk of a short-term pullback after dismissing a flurry of positive Chinese economic data.
- RSI divergence hints at near-term correction for AUD/USD and AUD/JPY rates.
- AUD/CHF eyeing a retest of the monthly high.
The Australian Dollar seemed relatively unfazed by robust Chinese economic data, as the nation’s largest trading partner registered a record trade surplus in November.
Exports jumped 21.1% year-on-year, marking the sixth straight month of growth in outbound shipments while imports rose 4.7%, undershooting market expectations of a 9.5% print.
The mixed release could foster a short-term pullback in several AUD crosses, despite the currency’s longer-term outlook remaining skewed to the topside.
Here are the key levels to watch for AUD/USD, AUD/JPY and AUD/CHF rates.
AUD/USD Daily Chart – Extended Topside Push at Hand
AUD/USD daily chart created using Tradingview
AUD/USD seems poised to continue its climb to fresh yearly highs, after slicing through key resistance at the September high (0.7413).
With the RSI eyeing a push into overbought territory and the MACD indicator storming to its highest level since early September, the path of least resistance continues to favour the upside.
Breaching the July 2018 high (0.7484) would probably carve a path to test the 78.6% Fibonacci (0.7573), with a daily close above opening the door for price to probe psychological resistance at 0.7700.
Alternatively, slipping back below 0.7400 could ignite a pullback towards the monthly low (0.7338).
AUD/USD 4-Hour Chart – RSI Divergence Hints at Pullback
AUD/USD 4-hour chart created using Tradingview
Jumping into the four-hour chart reinforces the bullish outlook depicted on the daily timeframe, as price continues to track within the confines of an ascending Andrews’ Pitchfork.
However, RSI divergence and a bearish crossover on the MACD indicator suggests that a short-term pullback could be in the offing.
Inability to gain a firm foothold above 0.7450 could generate a downside push back towards confluent support at the September high (0.7413) and 21-MA. Piercing that could bring support at the September 15 high (0.7345) into focus.
Alternatively, if the 0.7400 mark remains intact a continued topside push looks likely, with a break above 0.7450 probably neutralizing near-term selling pressure and signalling the resumption of the primary uptrend.
| Change in | Longs | Shorts | OI |
| Daily | -11% | 16% | -5% |
| Weekly | -11% | 5% | -7% |
AUD/JPY Daily Chart – Yearly High Within Reach
AUD/JPY daily chart created using Tradingview
AUD/JPY rates are devilishly close to challenging the yearly high set in August, after surging away from key support at the trend-defining 50-day moving average (75.98).
With both the RSI and MACD tracking firmly above their respective neutral midpoints, further gains seem likely in the coming days.
Clearing the December 3 high (77.56) would likely intensify buying pressure and propel price towards the August high (78.46).
On the other hand, failing to break to fresh monthly highs may result in a short-term correction back towards the December low (76.53).
AUD/JPY 4-Hour Chart – Struggling at Monthly High
AUD/JPY 4-hour chart created using Tradingview
However, jumping into the 4-hour chart hints at weakness in the recent 1.2% climb from the December low, as the RSI dips back below 60 and prices fail to hold above the 50% Fibonacci (77.38).
A pullback towards the November high (77.11) could eventuate in the near term, with a push below potentially propelling prices back to the monthly low (76.63).
On the other hand, piercing resistance at 77.50 would likely neutralize short-term selling pressure and carve a path to test the 61.8% Fibonacci (77.85)
| Change in | Longs | Shorts | OI |
| Daily | 19% | 13% | 15% |
| Weekly | 15% | 7% | 10% |
AUD/CHF Daily Chart – 50-DMA Nurturing Uptrend
AUD/CHF daily chart created using Tradingview
AUD/CHF rates appear to be gearing up for a topside push after sliding back to key support at the trend-defining 50-DMA (0.6599).
With the RSI notably U-turning at its neutral midpoint and price constructively perched above the 50% Fibonacci (0.6572), the path of least resistance seems higher.
Pushing back above the 21-DMA (0.6631) may generate a retest of the November high (0.6715), with a daily close above probably signalling the resumption of the primary uptrend and bringing the 61.8% Fibonacci (0.6862) into play.
On the other contrary, slipping below psychological support at 0.6600 could ignite a short-term pullback towards the sentiment-defining 200-DMA (0.6551).
AUD/CHF 4-Hour Chart – Descending Pitchfork Guiding Price Lower
AUD/CHF 4-hour chart created using Tradingview
Yet, zooming into the four-hour chart hints at further downside, as AUD/CHF rates continue to track within the confines of a descending Andrews’ Pitchfork.
With the RSI and MACD indicator tracking firmly below their respective midpoints, an extended downside push could be on the cards.
Failure to break back above the 100-MA (0.6638) could intensify selling pressure and drive price back towards the monthly low (0.6591). Clearing that could bring confluent support at the 50% Fibonacci (0.6572) and pitchfork median line into the crosshairs.
Alternatively, a push to test the 61.8% Fibonacci (0.6656) if support at the sentiment-defining 200-MA stays intact, with a break above the 50% Fibonacci (0.6667) carving a path to test the November high (0.6715).
-- Written by Daniel Moss, Analyst for DailyFX
Follow me on Twitter @DanielGMoss
