AUSTRALIAN DOLLAR RISES AFTER IMPRESSIVE CHINESE ECONOMIC DATA

The Australian dollar rose during the Asian session as traders reacted to strong economic data from China. According to the country’s bureau of statistics, fixed assets declined by 0.3% in August. That was better than the 0.4% decline analysts were expecting. It was also better than the previous month’s decline of 1.6%. Data showed that industrial production rose by 5.6% year-on-year while retail sales jumped by 0.5%. At the same time, the unemployment rate declined from 5.7% to 5.6%. These numbers are important for Australia because China is its biggest client.

The British pound was little changed during the Asian session as traders focus on the upcoming Bank of England (BoE) meeting and Brexit issues. On Brexit, the market reacted to the passage of the internal marker bill. The bill is likely to face further resistance in later stages of legislation. In a statement after the vote, Boris Johnson said that the bill was necessary because the EU had refused to take a “revolver off the table” in the talks. Meanwhile, the pound will react to employment data that will be released by the Office of National Statistics (ONS). The data is expected to show that the unemployment rate rose to 4.1% as the average earnings index fell by 1.3%.

There are further important economic data today. From the Eurozone, we will receive the second quarter’s labour cost index and economic sentiment at 09:00 GMT. These numbers will likely show that wage growth remained under pressure during the pandemic. The Swiss statistics office will release the producer price index (PPI) data, which is likely to show that factory-gate prices remained low. Other key numbers will be the Italian and French inflation data and the German ZEW current conditions number. From the United States, we will receive the export and import price index data.

EUR/USD

The EUR/USD pair rose to an intraday high of 1.1885. On the daily chart, the price is between the ascending channel that is shown in white. It is also above the 50-day and 25-day moving averages. The price is also slightly above the triple exponential moving average (TRIX) while the Chaikin oscillator has dropped below the neutral line. Therefore, the price is likely to continue rising as bulls attempt to cross the important resistance at 1.1900 and then proceed to 1.2000.

GBP/USD

The GBP/USD pair rose slightly during the Asian session. It is trading at 1.2851, which is slightly above the overnight low of 1.1.2810. The 25-day and 50-day moving averages have made a bearish crossover. Also, the RSI has moved from the oversold level of 19 to the current 41. The signal and main lines of the MACD have been relatively bearish. Therefore, the pair is likely to continue moving lower today as bears aim for moves below 1.2800.

XTI/USD

The XTI/USD pair was little changed ahead of an important demand and supply report by the EIA. The pair is trading at 37.20, which is in the same range it has been this week. It is also slightly below the 50-day and 100-day moving averages while the volatility, as measured by the ATR, has started declining. The RSI has also been stagnant. Therefore, the pair is likely to have a pullback today as bears attempt to move below 37.00.



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