AUD/USD defends support of 1-hour 50-MA as China PPI beats estimates

  • Better-than-expected China Oct. PPI reading helps the AUD defend the 1-hour 50-MA support.

The post-housing data drop in the AUD/USD appears to have come to a halt at the 1-hour 50-MA level of 0.7664.

As of writing, the pair is trading at 0.7675 levels; still down 0.10 percent on the day. 

China producer price index (PPI) (also known as factory gate prices) came-in at 6.9 percent y/y, beating the estimated decline to 6.6 percent. A better-than-expected PPI might put reflation trade back on investors' radar.

Thus, Aussie is trimming losses. The currency pair may revisit daily highs unless the 10-year US treasury yield starts rising in response to an upbeat China PPI figure. In such a case, the recovery in AUD/USD could stall.

AUD/USD Technical Outlook

FXStreet Chief Analyst Valeria Bednarik writes, "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

 

 

 

 

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 securities. 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 Forex 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.