As stated by the Chinese statistics agency, industrial production increased by 57% in April after growing by 92.30% in the past month. Year-to-date, production has surged by 106.1%. This is a sign that the Chinese economy is doing moderately well as global demand increases.
Meantime, in Australia, raising capital expenditure grew by 3.8% in the first quarter, while plant and machinery expanded by 9.1%. In total, the new private capital expenditure increased by 6.3%. These numbers are an indispensable component of the GDP.
The US dollar firmed versus most currencies before the latest GDP data.
The second statement shows that the economy expanded by 6.4% in the first quarter, supported by the government’s $2.8 trillion stimulus package. While the GDP data is necessary, the second reading does not significantly impact the US dollar/ The currency will respond to the latest initial unemployment claims numbers to show another weekly decline.
It will also return to the latest continuing home sales numbers. On Tuesday, data showed that new home sales fell in April while prices surged to the highest level in 15 years.
The price of crude oil held even after moderately bullish inventory data.
The Energy Information Administration (EIA) stated that the number of inventories fell by more than 1.66 million barrels last week. This was a more notable decline than the conventional 1.05 million and last week’s drop of 402k barrels.
The AUD/USD pair failed to 0.7720 as the US dollar firmed. The pair have created a rectangle pattern on the four-hour chart whose assistance and resistance are at 0.7690 and 0.7817, individually. The price is within the 38.2% and 50% Fibonacci retracement and is somewhat under the 25-day and 15-day moving average. Also, the Relative Strength Index (RSI) has decreased to 44. The pair will likely prevail in the current range ahead of the US GDP data.
The EUR/USD fell to a low of 1.2173 because of the more powerful US dollar. This decline occurred two days after the pair surged to the highest level after February this year. The team headed to cross the 25-day MA on the four-hour chart for the first time in two weeks. It also moved under the lower side of the ascending channel. Hence, after breaking out, the pair may keep dropping as bears target the 61.8% retracement at 1.2133.