AUD/USD analysis: Chinese inflation to set the tone

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7675

Rise in Chinese imports backed the Aussie.
Australian and Chinese data to set the tone in the Asian session.

The Australian dollar edged higher against its American rival, ending the day near a daily high of 0.7666. The Aussie found support at the beginning of the day on Chinese trade data, as despite the country's surplus widened by less-than-expected in October, imports rose beyond market's forecasts. China reported a trade balance of $38.2B in dollar terms, anyway above previous $28.61B. Imports rose by 17.2% in the same month, beating expectations of 16.0%, while exports increased by 6.1%, below previsions of 7.9%. Higher gold prices are also supporting the commodity-linked currency. Australia will release some housing figures during the upcoming Asian session, but attention will center on Chinese October inflation, seen up by 0.2% in the month, against previous 0.5%. A disappointing outcome will likely put the AUD under pressure. The 4 hours chart shows that the intraday recovery stalled right below the 23.6% retracement of its latest downward move, which is not enough to confirm more gains ahead, moreover as technical indicators lack directional strength within neutral territory. The pair could be forming a double bottom in the 0.7630 region, but the figure will be confirmed only on a break above 0.7729, the high set earlier this month.

Support levels: 0.7625 0.7590 0.7555

Resistance levels: 0.7685 0.7730 0.7770

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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