AUD/USD bulls await fresh direction after testing 0.7000 mark

• AUD/USD benefits from the broad USD weakness, optimism surrounding phase-one.
• The latest pullback from the five-month top might have resulted due to China’s soft retail sales growth.
• Investors look for further details to carry the four-week-old rise, US data/China PMI in the spotlight for now.

Having touched the 0.7000 psychological magnet, also a short-term key resistance, the AUD/USD buyers are catching a breather around 0.6990 ahead of Monday’s European session. The pair recently soared amid overall US Dollar (USD) weakness whereas US-China trade optimism might have added to the quote’s strength.

While nearness to phase-one signing and China’s warning to the US to stay out of the internal matters have grabbed the headlines during the early-day, Reuters’ news of weak retail sales from Beijing seems to be the latest to follow. The news relied on Xinhua to convey the forecast of an 8% increase in 2019 Retail Sales to CNY 41.1 trillion. The key economic data grew 9.0% in 2018, said the news. The US 10-year treasury yields and most Asian stocks are mildly bid by the press time.

Even so, prices are still positive and are well aligned towards posting a fifth positive week should this week’s Chinese Purchasing Managers’ Index (PMI) data follow the suit of November. In addition to Tuesday’s official PMIs, Thursday’s Caixin Manufacturing PMI will also be watched closely for fresh impulse.

On the other hand, second-tier housing and activity numbers from the US could lead the traders during the expectedly less active week.

It should, however, be noted that the US reaction to Beijing’s repeated calls to stay out of Taiwan, Hong Kong and Xinjiang matters will also be the key.

Technical Analysis

A daily closing beyond the ascending trend line since November 19, at 0.7000, becomes necessary for the bulls to aim for 0.7045 and July month top surrounding 0.7085.