Aussie and Kiwi Post Shooting Stars Ahead of Key Chinese Data

Both the AUD/USD and the NZD/USD put in shooting star candlestick formations on daily timeframes ahead of key Chinese Data due out later:

AUD/USD

Source: Tradingview, City Index

NZD/USD

Source: Tradingview, City Index

Shooting Star candlestick formations are indicative of a reversal of trend when at a topping formation. Early in the day, buyers come in and push the price higher. However later in the day, sellers overtake buyers and put price lower near the opening price. The color of the candle is irrelevant as long as the body of the candlestick is less than 50% of the wick.

It is true that the US Dollar Index (DXY) was bid most of the US session, which probably caused the Aussie and Kiwi to move lower. However, this just means that there wasn’t much of a reason to trade the Australian Dollar and New Zealand Dollar ahead of the China data releases in a few hours.

Source: Tradingview, City Index

Australia and New Zealand are large exporters to China. There is a strong correlation between the economy of China and the economies of Australia and New Zealand. As the economy of China goes, so goes the economies of Australia and New Zealand.

Later we will see some of the first data from China after the US-China trade deal was agreed to (and signed). This includes Q4 GDP (5.9% expected), December Industrial Production (5.7% expected), and Retail Sales (7.5% expected). The markets will have a better understanding of not only how the impending US-China “Phase One” deal affected China in Q4, but also the first impact on production and sales after an agreement was reached.

Expect some volatility around the data as traders position themselves for the data release. However, the shooting stars on the daily timeframe already indicate that traders may expect the data to be worse than expected!

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.