AUD/USD floats above 100-DMA support ahead of Australia GDP

• AUD/USD pokes 100-DMA after failing to defend RBA-led gains.
• Risk-aversion wave, pre-data anxiety weighs on prices amid a quiet session.
• Australia’s Q3 GDP is likely to deteriorate on QoQ and improve on YoY basis.
• China trade numbers for October, risk catalysts are also important for clear directions.

AUD/USD remains pressured around 0.6690, after reversing the Reserve Bank of Australia-led (RBA) gains as traders await the Aussie Gross Domestic Product (GDP) data on early Wednesday. That said, the market’s indecision amid a light calendar and mixed clues also challenge the pair traders.

The warnings of grim economic conditions from multiple US banks and downbeat earnings weighed on the market sentiment during late Tuesday. Among them were the United States Heads of Goldman Sachs, Bank of America Corp and JPMorgan Chase. Additionally, Bloomberg Economics also forecasted the lowest economic growth since 1993, to 2.4% for 2023.

However, downbeat prints of the US trade numbers and the inflation expectations join the optimism surrounding China to challenge the AUD/USD bears.

That said, US Goods and Services Trade Balance deteriorated to $-78.2 billion versus $-79.1 billion expected and $-73.28 billion prior. Further, US inflation expectations, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, extend the previous retreat from a one-month high by printing the second day of downside. The latest prints of the 5-year and 10-year inflation expectations are 2.38% and 2.43% respectively.

It should be noted that China, Australia’s biggest customer, is up for conveying more easing to its three-year-old Zero-Covid policy on Wednesday, per Reuters. Beijing’s latest move could be linked to the receding virus infections from the record high, as well as multiple announcements suggesting more unlocking of the virus-hit economy that’s the second biggest in the world.

Additionally, the RBA’s hawkish hike of 0.25%, with hints of more rate increases, allowed the AUD/USD to remain firmer during early Tuesday. However, the details of the RBA Rate Statement raise concerns over the Aussie economic growth, which in turn highlights today’s Australian GDP for the third quarter (Q3), expected 0.7% QoQ versus 0.9% prior, as well as 6.3% YoY versus 3.6% previous readouts. Following the Australian GDP outcome, China’s trade numbers for November will also entertain the AUD/USD pair traders.

Technical analysis

Failure to cross the 61.8% Fibonacci retracement level of the June-October downside, near 0.6855, joins bearish MACD signals and steady RSI to favor AUD/USD bears. However, a clear break of the 100-DMA support near 0.6690 becomes necessary for the sellers to aim for a late November swing low near 0.6585.