AUD/USD: The Australian dollar rallied, after falling for three straight sessions, following a report from the Wall Street Journal stating that the United States and China could reach a formal agreement at a summit around March 27 given progress in talks between both the economies. The Aussie trades 0.2 percent up at 0.7089, having hit a low of 0.7069 on Friday; it’s lowest since February 12. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7060 (Feb.8 Low), a break below targets 0.7016 (Dec.26 Low). On the upside, resistance is located at 0.7150 (Feb. 22 High), a break above could take it near 0.7206 (Feb. 21 High).
Australia’s Q4 business indicators data were weaker than anticipated, with profits, inventories and wages all below their forecasts.
Inventories were surprisingly weak at -0.2% q/q, which suggests that private non-farm stocks will make no contribution to Q4 GDP growth.
A disappointing fourth quarter GDP reading could further validate RBA’s decision to put rate cuts back on the table.
Focus now on RBA policy meeting due Tuesday for further impetus.
AUD/USD daily chart
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