AUD/USD firm, supported by 20 1hr sma ahead of Chinese trade balance

The Australian dollar is now all about the Chinese trade data. 

"China’s May trade data today will be a market highlight. Recent updates have exhibited considerable volatility: March to the upside; April to the downside. The external environment is unhelpful, and PMI’s suggest this trend will continue. Weakness in April imports is consistent with patchy, soft growth in the secondary sector," explained analysts at Westpac. 

What's driving the Aussie?

We have seen a surge in the aussie due to the RBA staying put at record lows of 1.75%, and being less dovish than expected, not even mentioning anything about further easing. Oil is also on the rise, stocks are battling on and the US dollar tanking on the back of market sentiment outpricing rate hikes in the near future from the Federal Reserve. AUD/USD was at its highest level since early May ahead of the Chinese trade balance data where we will be keeping an eye on on those exports.

AUD/USD levels

Technically, Valeria Bednarik, chief analyst at FXStreet explained that the pair stands at the 38.2% retracement of this year's rally, with clear aims of breaking higher and extending its rally. "In the 4 hours chart, the technical indicators are giving some signs of exhaustion in overbought territory, but the 20 SMA heads sharply higher below the current level, and is about to advance beyond the 200 EMA this last around 0.7340, all of which supports further gains towards the 0.7500 region and beyond."

AUD/USD outlook