China’s May trade surplus widened to CNY723.98bn from CNY585.69bn, as exports rose 13.8% year on year versus 9.8% in April, while imports increased 21.5% from 20.6%. In US dollar terms, the surplus printed at $105.43bn, compared with $92.1bn expected and $84.82bn previously; exports grew 19.4% against 15.0% forecast and 14.1% prior, and imports rose 27.4% versus 25.0% and 25.3%. The Australian dollar edged up after the release, with AUD/USD near 0.7045, up 0.04%.
The report linked stronger exports to earlier front-loading to pre-empt higher Gulf war energy costs, alongside demand for semiconductors and AI-related hardware. On the charts, AUD/USD remains below the 100-day Simple Moving Average, with the RSI (14) around 39. Resistance is flagged at the 100-day SMA near 0.7075; absent a daily close above that level, the pair is described as exposed to further downside.
Conflicting Signals and Fundamental Drivers
Given today’s date of June 9, 2026, the surprisingly strong Chinese trade data from May presents a conflicting signal for us. The surge in both exports and imports points to a resilient Chinese economy, which is fundamentally bullish for the Australian dollar. We see this as a positive sign for demand in Australia’s largest export market.
However, the AUD/USD pair’s weak price action, failing to break above the key 0.7075 resistance level, tells a different story. The market seems hesitant, likely weighing this positive regional news against broader global concerns or central bank policy. This technical weakness suggests that any rallies may be short-lived and could be seen as selling opportunities.
Commodity Demand, Technicals, and Trading Opportunities
We find the import data particularly credible, as recent statistics from the Port of Hedland showed iron ore shipments to China hitting a record high for the year in late May. This confirms strong Chinese demand for key Australian commodities, which should theoretically support the AUD. The current price weakness in the face of such strong fundamentals is what creates a trading opportunity.
We have seen this pattern before, especially during the 2022-2023 period, where strong Chinese fundamentals were often overshadowed by a hawkish US Federal Reserve. For traders believing the fundamental story will ultimately prevail, we would consider buying AUD/USD call options with a strike price just above 0.7075. Using July expiry options would provide enough time for the positive data to potentially shift market sentiment.
Conversely, for those who believe the bearish technicals and global macro picture will dominate, buying put options is the more prudent play. With the Reserve Bank of Australia meeting next week, implied volatility is likely to rise. ASX futures data suggests the market is pricing in a 45% chance of another rate hike, making a long put position an effective way to hedge against or profit from renewed AUD weakness.
