AUD/USD again aims 100-day SMA amid greenback weakness, China data still in pipeline

• Aussie recovers major gains to again challenge 100-day SMA.
• Data from China and the US will be observed for further direction.

The AUD/USD pair is on the bids around 0.7135 ahead of Europe markets open on Friday. The quote earlier gave a cold response to the RBA’s financial stability review report that signaled downside risks to the economy and trading partner. Though, overall weakness of the US Dollar (USD) likely based on recent comments from the Fed policymakers helped the Aussie recover earlier losses and rise to the day’s high.

Some of the influential Federal Reserve policymakers like Jerome Powell, Richard Clarida and James Bullard recently praised the central bank's caution and signaled pause to rate-hike trajectory.

Aussie traded in the small range since the day start despite the cautious tone of the Reserve Bank of Australia (RBA) during its bi-annual financial stability review. The central-bank downgraded growth forecasts and cited risks to trading partners/global financial system. The report also opened up about the housing market risk to the domestic economy.

The pair dropped on Thursday as the US producer price index (PPI) rose more than forecast whereas initial jobless claims dropped to 50-year low. Additionally, soft China inflation data could be considered as reasons for the Aussie's previous downturn.

Looking forward, China’s March month trade data indicates, trade balance to increase from $4.05 billion to $7.05 billion whereas exports (YoY) expected to recover from -20.8% slump to +7.3% rise with imports (YoY) likely dropping to -9.6% from -0.3%. Further, preliminary reading of the US Michigan consumer sentiment index will be up on the economic calendar having 98.00 forecast and 98.4 prior whereas developments surrounding the US-China trade deal will be an on-going force to watch.

AUD/USD Technical Analysis

0.7145/50 area, including 100-day SMA, seems immediate resistance with more than four-month-old descending trend-line at 0.7170, followed by 200-day SMA level of 0.7200, likely strong resistances then after.

Alternatively, 0.7105–0.7100 area, comprising 50-day simple moving average (SMA), seems adjacent support prior for the pair prior to making it revisit the ascending trend-line from March 08, 0.7070. It should also be noted that a break of 0.7070 could recall 0.7030 and 0.7000 supports on the chart.