FxWirePro: AUD/USD holds marginal gains above 20-DMA, scrapping of Covid-19 restrictions in China support

Chart - Courtesy Trading View 

Spot Analysis:

AUD/USD was trading 0.38% higher on the day at 0.6758 at around 07:00 GMT.

Previous Week's High/ Low: 0.6767/ 0.6629

Previous Session's High/ Low: 0.6775/ 0.6720

Fundamental Overview:

Scrapping of Covid-19 restrictions in China lends support to the Australian dollar.

China has revoked quarantine rules imposed on inbound travelers to meet the tolerance Covid policy. 

Following the move, China’s National Bureau of Statistics (NBS) has revised the 2023 Gross Domestic Product (GDP) forecast.

The agency now expects China 2023 GDP growth to 8.4% from 8.1% previously.

Data on Tuesday showed US US Good Trade Balance for November improved to $-83.3B versus $98.8B prior.

Exports stood at $168.9 billion, $5.3 billion less than in October, while Imports of goods for November were $252.2 billion, $20.8 billion less than the previous month.

Further, US S&P/Case-Shiller Home Price Indices for October dropped to 8.6% YoY versus 9.7% expected and 10.4% previous readings.

Focus going forward is on the US Pending Home Sales for November which holds the market consensus of 0.6% versus -4.6% previous readings.

Technical Analysis:

- AUD/USD is extending gains above 21-EMA

- The pair has ignored 'Inverted Hammer' formation on the previous day

- Pullback on account of bearish RSI divergence has bounced off 55-EMA support

- Momentum is turning bullish, Stochs and RSI are biased higher

Major Support and Resistance Levels:

Support - 0.6717 (21-EMA), Resistance - 0.6868 (200-DMA)

Summary: AUD/USD trades with a bullish bias. Scope for further upside, 200-DMA in sight. Bullish invalidation only below 55-EMA.