AUD/USD analysis: set to open lower on Chinese poor inflation
|AUD/USD Current price: 0.7508
- Chinese November inflation was even worse than expected.
- Base metal weakness adds to the bearish case of Aussie.
The Australian dollar fell against the greenback to 0.7504, its lowest since early June, to close a handful of pips above it, resuming its bearish trend. Failure to surpass the 0.7660 price zone mid-week exacerbated the negative sentiment towards the Aussie, which coupled with increased dollar demand for the above-mentioned outcome. Further denting the AUD was a steady decline in base metals, with gold plummeting to its lowest in five months. The decline would likely extend at the weekly opening, following Chinese data released during the weekend. China’s consumer price index, rose 1.7% year-on-year in November and held flat monthly basis, missing market's expectations. Also, the producer price index, which measures inflation at the wholesale level, rose by 5.8% year-on-year in November, well below the previous 6.9%, also missing expectations of 5.9%. Australia will report it October New Home Sales this Monday, latest at-6.1%. Technical readings in the daily chart support a bearish continuation, as the pair failed to retain gains above a bearish 20 SMA mid-week and plunged below it, while technical indicators continue heading south within negative territory. In the 4 hours chart, the 20 SMA heads south almost vertically, currently around 0.7540, the Momentum recovers within negative territory, while the RSI consolidates around 33, all of which maintains the risk towards the downside.
Support levels: 0.7490 0.7450 0.7420
Resistance levels: 0.7540 0.7575 0.7610
View Live Chart for the AUD/USD
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