AUD/USD on the cusp of a bullish breakout after strong Australian data
- The AUD/USD pair is close to a bullish breakout after strong economic data from Australia and China.
- In a report today, data by Caixin showed that China's services PMI rose to 57.8 in November.
- In Australia, exports and imports rose leading to a a$7.4 billion trade surplus
The AUD/USD is close to a major bullish breakout after strong economic data from Australia and China. The pair is trading at 0.7414, which is the highest it has been since September 1.
Australia trade surplus rises
The Australian economy is firing on all cylinders, as evidenced by the latest trade numbers. In a report today, the Australia’s Bureau of Statistics (ABS) said that the country’s exports increased by 5% in October to more than a$35.72 billion.
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In the same period, the country’s imports increased by 1% to more than a$28.26 billion. As a result, the overall trade surplus increased from a$5.6 billion to more than a$7.45 billion.
The country’s trade has received a boost from China, whose demand for raw materials has increased significantly recently. This demand has been coupled with high prices, with key Australia’s export goods like coal and iron ore continuing to do well.
These numbers came a day after the bureau released the country’s third-quarter GDP data. The economy bounced back by 3.3% in the third quarter driven by higher household spending. Also, early this week, the Reserve Bank of Australia (RBA) committed to continue supporting the economy.
China services PMI does well
This increase was because of strong demand for the country’s services that led to a record growth in employment. Input prices rose because of the relatively firm demand for products. Most importantly, businesses remained highly confident about the future prospects.
These numbers came two days after the company released strong manufacturing PMI data. The numbers showed that the PMI also remained above 50 for the seventh month in a row. In another report by HSBC yesterday, Chinese firms expect to go back to pre-pandemic levels by 2022, faster than the global average.
China and Australia are usually very related because of the volume of trade between the two countries. For one, China is the biggest buyer of Australia’s goods and services.
AUD/USD technical outlook
Turning to the daily chart, we see that the AUD/USD pair has been in an overall strong uptrend. At the current level of 0.7414, the pair is at the highest level since September. The trend is being supported by the short and longer-term moving averages. Therefore, I suspect that the upward momentum will continue if it manages to cross this resistance. You can create an account with leading forex brokers to take part in this rally.