The AUDUSD pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow band near the lower end of its weekly trading range.
December 14, GKFX – Despite the recent optimism over easing US-China trade tensions, the pair struggled to build on this week’s steady recovery move witnessed over the past three sessions and came under some renewed selling pressure on Friday following the release of disappointing Chinese economic data.
Chinese retail sales missed forecasts and came in to show an annualized growth of 8.1% for November. Adding to this, industrial production growth slowed to the weakest level since the start of 2016 and prompted some aggressive selling around the China-proxy Australian Dollar.
The pair erased all of its weekly gains, though uncertainty over the Fed’s rate hike path in 2019, especially after the US President Donald Trump latest criticism on Thursday, kept the US Dollar bulls on the defensive and helped limit further downside, at least for the time being.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or the latest leg of a downfall marks the resumption of last week’s sharp retracement slide from the 0.7400 neighborhood, or over four-month tops.
Moving ahead, today’s US economic docket, highlighting the release of monthly retail sales data will now be looked upon for some short-term trading impetus on the last trading day of the week.
AUDUSD Technical Forecast
A follow-through selling has the potential to continue dragging the pair further towards 0.7140 horizontal zone en-route the 0.7100 handle. On the flip side, recovery attempts back above the 0.7200 handle might now confront some fresh supply near the 0.7220-25 area, which is followed by resistance near weekly tops, around the 0.7245-50 region.
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