AUD/USD analysis: Aussie still backed by Chinese data and base metals

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7362

The Australian dollar extended its latest rally against the greenback, posting a fresh 4-week high of 0.7384 before closing the day marginally higher some 20 pips below such high. The Aussie found support in mixed Chinese inflation figures, as December's CPI eased to 2.1% from 2.3%, just above the 12-month average of 2.0%, although the core reading ticked higher. Producer prices, however, rose beyond expected, up by 5.5% against a media forecast of 4.5% and previous 3.3%. Base metals also underpinned the Australian currency, with iron ore prices up 5.5% this Tuesday to their best level in nearly a month, and copper prices adding roughly 3%. The AUD/USD pair retreated after reaching a major resistance, the 61.8% retracement of the latest daily slide, with the following pullback meeting buying interest around the 50% retracement of the same decline, indicating that buying interest remains strong. In the 4 hours chart, the price held above a bullish 20 SMA, although the moving average has lost upward strength. The same happened with technical indicators that turned flat within positive territory, indicating the need of fresher highs to confirm a steeper advance beyond the 0.7400 level.

Support: levels: 0.7340 0.7300 0.7270

Resistance levels: 0.7390 0.7420 0.7450

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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