Mini battle going on over the last 5 hours
The AUDUSD fell on the back of weaker China trade data over the weekend. The price fell in the Asia-Pacific session and extended those declines in the London/European morning. Over the last 5 hours, the price has been consolidating above the 38.2% retracement of the move up from the July 31 low and below the 100 hour moving average (blue line in the chart below). The hundred hour moving average currently comes in at the 0.73667 level. There was an attempt to move back above it a few hours ago but that push failed.
There is a mini battle going on between the 2 levels. Look for a break with momentum to show "the markets" bias. It may just be back and forth as counter forces from a fundamental perspective may be in play...
Last week the RBA did not keep language on the currency in their statement and spoke more positively about employment (""Labour market conditions are generally better than had been expected a few months ago, although spare capacity still remains,") . Retails sales for June were better than expectations. The employment report showed higher employment change, but the unemployment rate also increased. The trade balance remained in deficit but came in near expectations. China is a concern.
A lower currency helps the export sector by making goods more affordable abroad, but they also increase the cost of imports. So there is a fine balance.
The technical battle going on seems to show the reluctance of the market to go too far. The highs from last week and the China news is not good news, but other concerns seem to be keeping traders more cautious for the time being at least. Watch the technical levels for clues. The "market" sentiment cannot hide from the price action and the tools applied to it .
