Soros Punts AUD With China Data Looming

The Australian dollar has clawed back some of the declines following the RBA rate cut amidst talk that the world's most-famous FX trader was in on the action. Chinese trade figures could provide a further boost or add to the case for declines. The yen was the best performer on Tuesday after sharp falls in EUR and GBP. The triple AUDUSD charts from Friday confirmed the shorts from Apr 17 due to the negative sentiment convergence in the daily, weekly and monthly charts. The euro's recovery remains within range despite gold's tumble to 1440s. There are 2 EURUSD trades in the Premium Insights, existing since Thursday's ECB meeting. See our latest Premium Insights for the rationale and methodology of trades and charts.

The Australian press is humming about a George Soros $1 billion – and perhaps $3 billion -- AUD short ahead of the RBA decision. He is said to have earned as much as $60 million on the trade.

The focus will stay on the Aussie when China releases April trade balance numbers at 0200 GMT. The import/export data often serves as a preview of upcoming industrial data. In particular, import numbers provide a look at early demand in the global manufacturing cycle. For April, imports are expected to rise 13% y/y while exports are forecast to rise 9.2%. The trade balance (exp $16.15B surplus) is less of a concern.

Expect a knee jerk reaction in the Australian dollar but it's rarely more than 30-40 pips on this release. A climb above 1.0230 would put AUD/USD back at pre-RBA levels. A disappointing result could renew the focus on the cycle low at 1.0115.

The Chinese numbers come after a choppy day in Europe and the US. The euro jumped on upbeat German industrial numbers but gave back all the gains in US trading. So far the 1.3070 level has proven to be solid support and there is chatter about semi-official buying around 1.3050.