AUD/USD – Australian dollar resumes downturn after soft Chinese numbers

AUD/USD has returned to its losing ways in the Wednesday session. Currently, the pair is trading at 0.6917, down 0.40% on the day. On the fundamentals front, Australian Wage Price Index remained pegged at 0.5%, shy of the estimate of 0.6%. In the U.S., the markets are braced for soft consumer spending numbers. Retail sales is projected slow to 0.2%, down from 1.6% in the previous release. Core retail sales is projected to drop to 0.7%, compared to 1.2% in March. Thursday will be busy, as the U.S. posts building permits, unemployment claims and the Philly Fed Manufacturing Index.

It’s been a rough week for the Australian dollar, which has slipped 1.2% and continues to set new lows in 2019. The currency sagged on Monday after the U.S. slapped new tariffs on some $200 billion in Chinese goods, with China quickly retaliating with tariffs on $60 billion in U.S. products. There was more bad news out of China on Wednesday, as industrial production and retail sales missed expectations. Industrial production fell to 5.4% in April, well short of the estimate of 6.5%. This reading dropped from 8.5% a month earlier. Retail sales also slipped to 7.2%, down from 8.7% in March. This was much lower than the forecast of 8.6%. The Aussie is sensitive to Chinese data, as China is Australia’s number one trading partner. AUD/USD has posted four straight losing weeks and the pair remains under strong pressure this week.

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AUD/USD Fundamentals

Tuesday (May 14)

• 20:30 Australian Westpac Consumer Sentiment. Actual 0.6%
  
• 21:30 Australian Wage Price Index. Estimate 0.6%
• 22:00 Chinese Industrial Production. Estimate 6.5%. Actual 5.4%
• 22:00 Chinese Retail Sales. Estimate 8.6%. Actual 7.2%
  

Wednesday (May 15)

• 8:30 US Core Retail Sales. Estimate 0.7%
• 8:30 US Retail Sales. Estimate 0.2%
• 8:30 US Empire State Manufacturing Index. Estimate 8.2
• 9:15 US Capacity Utilization Rate. Estimate 78.7%
• 9:15 US Industrial Production. Estimate 0.0%
• 9:30 US FOMC Member Quarles Speaks
• 10:00 US Business Inventories. Estimate 0.0%
• 10:00 US NAHB Housing Market Index. Estimate 64
• 10:30 US Crude Oil Inventories. Estimate 0.0M
• 16:00 US TIC Long-Term Purchases. Estimate 36.3B

Thursday (May 16)

• 8:30 US Building Permits. Estimate 1.29M
• 8:30 US Unemployment Claims. Estimate 220K
• 8:30 US Philly Fed Manufacturing Index. Estimate 10.0
• 8:30 US Housing Starts. Estimate 1.21M

*All release times are DST

* Key events are in bold

AUD/USD for Wednesday, May 15, 2019

Open: 0.6944 High: 0.6948 Low: 0.6915 Close: 0.6917

AUD/USD Technical

AUD/USD has edged lower in the Asian and European sessions

• 0.6825 is providing support
• 0.6968 is the next resistance line
• Current range: 0.6825 to 0.6968

Further levels in both directions:

• Below: 0.6825, 0.6744 and 0.6686
• Above: 0.6968, 0.7085, 0.7190 and 0.7240

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