The Aussie bounced up from two-week lows at 0.6520 on Thursday, favored by a moderate US DOllar reversal although the negative risk sentiment is capping bulls at the upper range of 0.6500. Earlier on Thursday, China’s trade balance data failed to offset concerns about the financial stability of the Asian main economy triggered by Moody’s warning. Beyond that, Australian trade data has failed to boost investors’ optimism. Exports nudged up 0.4% with Exports dropping 1.9% and the trade surplus increasing well below expectations.
The weak domestic data and reactivated concerns about China’s economy are boosting bets that the RBA will have to cut rates in 2024. This is likely to act as a headwind for the Aussie. The technical picture shows the pair in a corrective retracement from last week’s highs at 0.669 with price action below the 4h 50 and 100-SMAs, and oscillators in negative territory. Next support is at 0.6520 and below here, 0.6480. On the upside, the pair should breach the previous lower high, at 0.6595 to ease downside pressure.
