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COZfx: Aussie holds on amid weak trade data

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COZfx: Aussie holds on amid weak trade data

Postby dwang » Fri Jun 06, 2014 2:14 am

COZforex: Attention remained focused on the euro in Asia Thursday though data sets out of Australia and China disappointed on growth prospects, particularly for exports such as iron ore.

Australia's April trade balance dropped into a deficit at A$122 million, compared to an A$300 million surplus expected. AUD/USD however held at 0.9278, up 0.02%, after the data.

In technical analysis, COZFX strategist Nigel Boynton said, AUD/USD is predicted to find support at 0.9260, and a drop through could take it to the next support line of 0.9242. Meanwhile, the pair is predicted to find its first resistance at 0.9293, and a rise through could take it to the next resistance line of 0.9308.

In commodities, LME Copper prices declined 1.4% or $95.0/MT to $6835.0/MT. Meanwhile, Aluminium prices edged down 0.3% or $6.0/MT to $1796.5/MT.

The May HSBC China Services PMI declined to 50.7 from 51.4 in April. "Latest data signalled a relatively big decline in the business expectations index, which fell to an 11-month low of 58.1, down from 60.7 in April," said HSBC chief China economist Qu Hongbin.

The new business and outstanding business indices were slightly weaker than April. The employment index, unchanged over the month, remained at a relatively low level. Coming after the stronger Manufacturing PMI reading for May, the slight disappointment in the headline Services PMI suggests that growth momentum remains slow and private sector sentiment is weak. We think policymakers should continue to ease monetary and fiscal policies in the coming months to help support growth.

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