FxWirePro: AUD/USD slips lower, markets digest surprise PBOC benchmark cut

Chart - Courtesy Trading View 

Spot Analysis:

AUD/USD was trading 0.07% lower on the day at 0.7205 at around 07:15 GMT

Previous Week's High/ Low: 0.7314/ 0.7148

Previous Session's High/ Low: 0.7293/ 0.7198

Fundamental Overview:

Chinese data released earlier in the day showing that the GDP grew 4% year-on-year and 1.6% quarter-on-quarter in the fourth quarter of 2021. 

The data also showed that industrial production grew 4.3% year-on-year and retail sales grew 1.7% year-on-year in December, while the unemployment rate was at 5.1%.

Mixed data, risk-off mood and firmer USD weigh on the pair. Market digest the People's Bank of China (PBOC) surprise benchmark cut.

PBOC cut borrowing costs for medium-term loans for the first time since April 2020. 

Technical Analysis:

- AUD/USD is extending weakness for the 3rd straight session 

- Price action has failed to hold break above daily cloud

- RSI has slipped below the 50 mark and is biased lower

- The pair has slipped below 200H MA and GMMA has turned bearish on the intraday charts

Major Support and Resistance Levels:

Support - 0.7165 (Trendline), Resistance - 0.7239 (5-DMA)

Summary: AUD/USD trades with a bearish bias. The par is on track to test trendline support at 0.7165.