China Data Surprises Markets Positively

Chinese data surprised the markets positively in this session, as the trade balance came out at $31.6bln (Reuters poll $19.7bln) much better than expected. And not only exports have grown 3 times more than expected but equally importantly imports have doubled economists’ expectations. This indicates that the Chinese manufacturing sector and the Chinese economy in general is displaying considerable improvement in the last few months.

It might have been the Christmas period it might have been the latest apple gadgets, but whatever it is, analysts are now more optimistic on the worlds’ largest producer that it will continue to expand. The aussie is up 0.3% right after this announcement against the greenback trading at 1.0545 at the moment. On the other hand, the Japanese yen continues its depreciating path mostly uninterrupted for the last few weeks on anticipations that Abe will push forward it rapid monetary and fiscal expansion plans to inflate and the economy.

USD/JPY trades near the 2½ year high at 88.10 at the moment. European Central Bank and Bank of England monetary decisions are due later in the day even though analysts do not expect any major alteration in monetary policy from either Bank.

Trade Idea

AUD/USD Daily Chart
The pair has gained more than 40 pips since the Chinese data surprised the markets. Clearing 1.0550-60 area should lead the pair towards 1.0620 fairly quickly. Support at 1.0500 area and below.
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