AUD/USD slides towards 0.6700 on China Covid concerns, Aussie Retail Sales eyed – Crypto News – Crypto News
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AUD/USD grinds lower, below 0.6800 ahead of US NFP AUD/USD grinds lower, below 0.6800 ahead of US NFP

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AUD/USD slides towards 0.6700 on China Covid concerns, Aussie Retail Sales eyed – Crypto News

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2 years ago

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  • AUD/USD faces barriers to extending the weekly gains.
  • China reports record Coronavirus cases, witnesses civil disobedience in Shanghai, Beijing.
  • Prospects of Fed’s easy rate hikes favor Aussie pair buyers even as RBA’s lacks hawkish moves.
  • Australia’s Retail Sales, Inflation data and comments from RBA Governor Lowe, Fed Chair Powell can entertain traders pre-NFP.

AUD/USD witnesses difficulties in stretching the weekly gains beyond 0.6750 as it begins the key week on a back foot around 0.6720.

Coronavirus fears in China have joined the protest against the government’s Zero-Covid policy to add to the market’s woes. Additionally, the Reserve Bank of Australia’s (RBA) mixed comments and the Aussie pair trader’s anxiety ahead of the key data/events also challenge the AUD/USD bulls. Even so, concerns surrounding easy rate hikes from the US Federal Reserve (Fed) allowed the pair buyers to remain hopeful ahead of crucial data and events.

China reported an all-time high of COVID-19 daily cases with nearly 40,000 new infections on Saturday. The dragon nation has been using the strict policy to limit the virus spread but the outcome hasn’t been a positive one so far. On the contrary, a deadly fire in a building was allegedly linked to the virus-linked lockdown measures and resulted in mass protests in Beijing and Shanghai.

Also negative for the AUD/USD pair could be the downbeat China data publishing this weekend. China’s Industrial Profit dropped to -3.0% during the January to October period versus -2.3% marked for the January-September era. Additionally, the record high growth in the US Black Friday online shopping also acts as a negative barrier for the AUD/USD prices.

It’s worth noting that the prospect of the Fed’s slower pace of interest rate hikes weighed on the US Dollar last week even if the Reserve Bank of Australia (RBA) officials appeared not too hawkish. Also positive could be the People’s Bank of China’s (PBOC) cutting of the Reserve Requirement Ratio (RRR) by 25 basis points (bps) effective from December 5.

Looking forward, Australia’s Retail Sales for October, expected 0.4% versus 0.6% prior, will act as an immediate catalyst for the AUD/USD pair. However, major attention will be given to the risk catalysts like the Covid headlines and rate concerns ahead of the nation’s recently initiated monthly inflation data, comments from RBA Governor Philip Lowe and Fed Chair Jerome Powellas well as Friday’s US employment report for November.

technical analysis

Despite the latest struggle, a convergence of the 100-Day Moving Average (DMA) and an upward-sloping support line from November 04, around 0.6690, restricts the short-term AUD/USD downside.

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