AUD/USD shrugs off softer than expected China data
|- AUDUSD remains on the recovery mode despite China’s weaker than expected, but higher than previous, month inflation numbers.
- News of regenerating wildfires in Australia, fresh missile strikes in Iraq keep a tab on the pair’s recovery.
- US data, Fedspeak and trade/political headlines will be on traders’ radar.
AUD/USD keeps the previous day’s recovery active while trading around 0.6875 during early Thursday. The pair seems to ignore the recently published downbeat inflation data from its largest customer China. The quote benefited from the US-Iran de-escalation on Wednesday.
China’s December month Consumer Price Index (CPI) lagged below 4.7% forecast to march 4.5% prior YoY whereas the Producer Price Index (PPI) slipped beneath -0.4% expected to -0.5% versus -1.4% earlier. It is also notable that the CPI weakened past-0.3% forecast and 0.4% earlier reading to 0.0% on MoM.
Read:Chinese Consumer Price Index (YoY): +4.5% (vs +4.7 % exp)
Earlier during the day, the pair showed a mildly positive reaction to November month Australian Trade Balance that crossed 4502M prior to 5800M but stayed below 5915M expected figures.
In addition to the softer than expected data, news that rockets landed Baghdad’s green zone and fresh warnings of bushfires from Australian forests challenged the pair buyers.
With this, the market’s risk tone stays sluggish with the US 10-year treasury yields halting their previous day’s recovery around 1.86% whereas S&P 500 Futures marking 0.10% gains to 3,263 by the time of writing.
Looking forward, speeches from the US Federal Reserve (Fed) policymakers, including Vice Chair Richard Clarida and the New York Fed President John C Williams, will be the key to watch. Also, weekly jobless claims could offer additional information to watch.
In no case one should underestimate the power of geopolitical headlines from either the US or Iran, as well as US-China trade news, to offer volatile markets.
Technical Analysis
The pair needs to cross a 200-day SMA level of 0.6895 in order to justify the recent recovery, failing to do so can keep directing the quote towards December 18 low near 0.6838 and three-month-old rising trend line, at 0.6811 now.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.