FX News – Jan 20 2014: AUD/USD Fails Attempt at Return to 0.88

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After taking a huge beating in last week's trading, the AUD/USD pair had slight gains during today's session. The recovery was fueled by Chinese data that were released earlier today.

Chinese GDP was better than expected in its performance over the past 12 months at 7.7% versus the projected 7.6%. Q4 GDP was lower than expected, however, as it came out at 1.8% compared to the expected 2.0%. Retail Sales, meanwhile, was within expectations at 13.6%.

With the release of the Chinese data, the AUD/USD attempted to return to the 0.88 but fell short as it peaked only at 0.8797. It spent most of today's session so far at the 0.8780 area. It is currently trading at 0.8786, with initial resistance at 0.8802, followed by 0.8824. Meanwhile, initial support is at 0.8734, followed by 0.8712.

Earlier, the USD/JPY opened on a weak note due to the poor performance of the Nikkei. But as Japan released its industrial figures, the tide shifted. Industrial production in November was weak, as it contracted by 0.1% compared to the previous month, and only grew by 4.8% in 12 months versus the previous growth of 5.4%. Its Capacity Utilisation in November contracted by 0.5% compared to a growth of 1.2% in the previous period.

These poor numbers led to a rise in the USD/JPY pair later in the Asian session. After dropping below the 103.90 area, it rose up to the 104.00 zone. Further movement from the pair is expected when the Bank of Japan announces its interest rate decision on Wednesday (3:00AM, GMT). Japan's interest rate is currently at 0.1%, and no change is expected at the moment.
The USD/JPY pair is currently trading at 104.12 with initial resistance seen at 104.38, followed by 104.65. Meanwhile, initial support is at 104.08, followed by 103.82.

By FX Strategy Team, Published on 20th of January 2014
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