The AUD/USD tilted upwards after the relatively positive China trade numbers ahead of a new stimulus in Australia as the number of Covid cases rise. The pair rose to 0.7500, which was 1.23% above the lowest level last week.
Australia dollar steady
The Australian dollar rose slightly against the US dollar after China published the latest trade numbers. The data showed that the country’s exports increased by 32.2% in June after rising by 27.9% in the previous month. This increase was better than the median estimate of 23.1%. It provided further evidence that the country’s economy was doing well as the world economy reopened.
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China imports increased by 36.7% in June after rising by 51.1% in the previous month. This increase was equally higher than the median estimate of 30%. Consequently, the country’s trade surplus widened to more than $51.53 billion, which was $5 billion higher than in the previous month. Analysts were expecting the surplus to fall to $44.2 billion.
The Chinese trade numbers have an impact on the AUD/USD because of the volume of goods that China buys from Australia. Australia sells more than 70% of its goods to China.
The AUD/USD is also rising ahead of a speech by Australia’s Prime Minister, Scott Morrison. He is expected to announce a new stimulus package to support businesses as the country faces another wave of coronavirus. New South Wales (NSW) has even placed limitations on movements. The new announcement could see the government return the JobKeeper program that was ended in March.
The AUDUSD will also react to the latest US inflation data that will come out later today. Economists expect the data to show that US inflation eased slightly to 4.9% in June while core CPI rose to 4.0%.
AUD/USD technical analysis
The four-hour chart shows that the Australian dollar formed a Gartley pattern that is usually a bullish sign. This pattern is illustrated by XABCD above. The pair has also moved above the 50-day and 25-day exponential moving averages (EMA), which is also a bullish sign. The Relative Strength Index (RSI) has also kept rising. Therefore, the pair will likely keep rising as bulls target the next key resistance level at 0.7550. On the flip side, a drop below 0.7430 will invalidate this trend.
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