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AUD/USD drops to lows below 0.7650 post-mixed China’s inflation, RBA

  • The Aussie drops nearly 25-pips as the retreat extends on mixed China’s inflation.   
  • RBA’s warning on excessive lending risks adds to the weight on AUD/USD.
  • US dollar holds the lower ground amid dovish Powell, ahead of US PPI data.

AUD/USD is trading under pressure below 0.7650, having turned south from daily highs of 0.7661 on mixed Chinese inflation figures and a cautious tone seen in the RBA’s Financial Stability Report (FSR).

The annualized Chinese Consumer Price Index (CPI) and Producers Price Index (PPI) outpaced expectations. However, the monthly CPI came in below forecasts at -0.5% in March, showing that the post-pandemic recovery in domestic consumption has still not picked up pace.  

At the time of writing, the aussie trades 0.12% lower at 0.7641, having hit fresh daily lows at 0.7637 in the last minutes.

The rebound in the US dollar alongside the Treasury yields seems to add to the weight on the aussie dollar. The US dollar index is attempting a bounce around 92.10 while the 10-year US rates recover to 1.63%.

The sell-off in the US yields sent the dollar under the bus after Fed Chair Jerome Powell reiterated the dovish outlook on the monetary policy while downplaying the inflation risks.

Meanwhile, the RBA warned of excessive lending risks amid a surge in house prices in its latest Financial Stability Review (FSR), unnerving the optimists.

However, the mild gains in the S&P 500 futures and the rally in oil prices are offering support to the Aussie bulls. Next of note for the major remains the US PPI data release, as the dynamics in the dollar and yields could likely remain the main market motor.

AUD/USD: Technical levels to consider

AUD/USD

Overview
Today last price0.7640
Today Daily Change-0.0012
Today Daily Change %-0.16
Today daily open0.7652
 
Trends
Daily SMA200.7667
Daily SMA500.7715
Daily SMA1000.7651
Daily SMA2000.7407
 
Levels
Previous Daily High0.766
Previous Daily Low0.7602
Previous Weekly High0.7694
Previous Weekly Low0.7531
Previous Monthly High0.785
Previous Monthly Low0.7562
Daily Fibonacci 38.2%0.7638
Daily Fibonacci 61.8%0.7624
Daily Pivot Point S10.7616
Daily Pivot Point S20.758
Daily Pivot Point S30.7558
Daily Pivot Point R10.7675
Daily Pivot Point R20.7697
Daily Pivot Point R30.7733

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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