The Australian dollar has kicked off the week with considerable gains. In North American trade, AUD/USD is trading at 0.7110, up 0.43% on the day. The Aussie is coming off one of its worst weeks in 2020, with a decline of 2.2% last week.
China GDP accelerates
China’s economy grew 4.9% in the third quarter, up from the gain of 3.2% in Q2. Although this fell short of the forecast of 5.5%, investors were pleased with the GDP reading. Other Chinese data also pointed upwards. Industrial Production climbed 6.9% year-over-year, up from 5.6% beforehand. As well, Retail Sales climbed 3.3%, up from 0.5%. This was the strongest gain of the year. The Australian dollar is sensitive to key Chinese data, and the solid numbers have sent AUD/USD higher on Monday.
On Tuesday, the RBA will release the minutes of its October meeting. At the meeting, the RBA held rates at 0.25%, but dropped a broad hint that the bank would press the trigger and trim rates before the end of the year. The RBA meets next on November 3rd, and if the minutes reiterate that a rate cut is imminent, the Aussie’s slide could resume.
- There is support at 0.7066, followed by a support line at 0.7054
- AUD is testing resistance at 0.7094. This is followed by support at 0.7110
- AUD/USD broke below the 10-day MA late last week
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