The AUD/USD price tilted higher after the strong China GDP numbers. The pair is trading at 0.7200, which is about 0.15% above the lowest level last week.
China GDP numbers
Australia and China have a close trading relationship. China buys most of Australia’s goods and services, which explains why the country’s economy has done well over the years.
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On Monday, China published strong GDP numbers for the fourth quarter. According to the National Bureau of Statistics, the Chinese economy grew from 0.2% in Q3 to 1.6% in Q4 on a QoQ basis. This performance was better than the median estimate of 1.1%.
The Chinese economy expanded by 4.0% on a year-on-year basis, becoming one of the best performers in the quarter. Analysts were expecting the data to show that the economy expanded by just 3.6%.
This growth was spread across the various industries. For example, fixed asset investments rose from 5.2% in Q3 to 4.9% in Q4. This was also better than the expected 4.8%. Industrial production rose 4.3%.
And last week, trade numbers showed that the country’s trade surplus grew to a record high of $676 billion in 2021. In contrast, the United States had a record trade deficit as imports rose while exports fell.
Additional data from China showed that the country’s unemployment rate rose slightly to 5.1% in December while retail sales increased to 1.7%.
These numbers show that the Australian economy benefited from the resurgence and resilience of the Chinese economy. This explains why the AUD/USD pair moved slightly upwards.
AUD/USD forecast
The four-hour chart shows that the AUD/USD pair has been in a strong bearish trend since Friday. In this period, the pair declined from last week’s high of 0.7313 to a low of 0.7197. It managed to decline below the 23.6% Fibonacci retracement level.
The AUDUSD pair also managed to move below the 25-day and 50-day moving averages. The two are even about to make a bearish crossover pattern while the Relative Strength Index (RSI) has declined from an overbought level.
Therefore, the path of the least resistance for the pair is lower, with the next key level being the 50% retracement point at 0.7155.
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