Aussie dollar finally fell on last week after twice failed to breach the trendline. The trendline remains slightly above 0.7750 and earlier swing highs seems between 0.7780 and 0.7835.
According to the Xinhua News Agency reported that this year’s Chinese government work report pointed out that China’s GDP growth target in 2017 is set at around 6.5%, to maintain the fiscal deficit in 2017 at 3%, CPI rose about 3%, M2 about 12%
Last week’s Data Review:
- The balance on goods and services was a surplus of $1,302m in January 2017, a decrease of $2,032m (61%) on the surplus in December 2016.
- Total dwellings approved rose 1.8% in January following a fall of 2.5% in the previous month.
- Economy grows 1.1% in December quarter, escape recession
- Current account deficit narrows to $3.9 billion
- Company gross operating profits rose 20.1% in the December quarter 2016.
Local data- Retail sales on Monday, RBA cash rate on Tuesday7 March 2017, 2.30 pm AEDT scheduled. It is widely accepted RBA holds the rate.
“The RBA is universally expected to pause again at 1.5%. The global backdrop is favourable, where the Fed could hike as soon as this month, and Chinese hard landing fears are now a distant tail risk,” said TD’s analysts.
China- Trade balance on Wednesday, CPI y/y basis Thursday are the key risk event ahead.
The price has support finds at 0.7540 and 0.7500/0.7490 below this 0.7430 exists. The 20M Sma finds at 0.7380.
Alternatively, resistance seems at 0.7640, 0.77 and 0.7750
Further selling expected below 0.7490 aiming at 0.7450/0.7430.
RBC’s Michael Cloherty “Having just refreshed its forecasts as part of its February communication, we do not expect much policy signal from the RBA. Global growth looks increasingly robust, the terms of trade have held their recent gains, Q4 domestic growth was almost ½%pt better than its estimate, and the housing market has been resurgent. Countering this, data on prices have been soft. We expect this will leave the statement with a neutral tone, though it may be hard to curb the optimism on the improving global outlook”.
What’s on today?
January Retail sales- forecast 0.4% vs -0.1%
Review-The seasonally adjusted estimate fell 0.1% in December 2016. This follows a rise of 0.1% in November 2016 and a rise of 0.4% in October 2016.