Chinese economic data published in this morning's Asian session opened trading earlier this week with somewhat mixed readings.
China's economic growth in the second quarter grew at 6.3%, up from 4.5% previously, but fell short of expectations of 7.1%.
Industrial production posted encouraging numbers, but retail sales fell less than forecast in June.
Commodity currencies including the Australian dollar and the New Zealand dollar showed a decline in the Asian trading session after being affected by the release of the data as China is their largest trading partner.
As can be seen on the chart of the AUD/USD currency pair, the price is seen continuing to decline at the close of trading at the end of last week.
In retrospect, last week saw a significant surge in prices following a significant depreciation of the US dollar after inflation data was scrutinized.
The price managed to jump up to the 0.69000 resistance zone, but at the end of the week the increase did not continue, rather the price slightly retreated back down.
Resuming trading earlier this week, the price continued its decline which has moved below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the AUD/USD chart warning investors of a possible trend change.
If the decline continues lower in the following sessions, the price will stop at around 0.67500 before testing the RBS (resistance become support) zone of 0.67000.
However, if the price manages to bounce back, the MA50 barrier will try to be overcome before the 0.69000 resistance zone is once again tested.
If this week the resistance is successfully broken, the price will record the latest 5-month high level with the latest target to aim at around 0.7000.
Investors will also be looking forward to the release of Australian jobs data this week which will drive the direction of the Aussie dollar.
