AUD/USD falls below 200-DMA as traders eye 0.6500
- AUD/USD traders are awaiting a busy economic calendar In the week, with the focus on the latest Federal Reserve meeting.
- US jobs data last week portrayed the economy as resilient, but investors are eyeing the release of November’s US CPI.
- China’s deflationary scenario, a headwind for the Aussie Dollar (AUD), as Australia remains one of its largest trade partners.
The AUD/USD extends its losses for the second straight trading session, and slips below the 200-day moving average (DMA) as investors await monetary policy decisions from major central banks ahead of the next year. At the time of writing, the pair is trading at 0.6559, down 0.19%.
AUD/USD pair at the mercy of weak Chinese data, risk-off impulse
The lack of economic data in the Aussie and United States docket left traders adrift to last week’s US jobs market dynamics and China’s inflation report. The US labor market has shown signs of easing, ahead of the latest Nonfarm payrolls report, revealed on Friday, which crushed estimates, bolstered by a hiring in healthcare, and automobile factories, after the UAW ended its strike.
The Aussie Dollar (AUD) is also greatly influenced by China’s economy. Consumer Prices in the latter dropped the most in three years in November, while deflation in the Producer Price Index (PPI) accelerated. Sources cited by Reuters said “the weak core CPI reading was a warning about persistently sluggish demand,” which remains the top priority for China, as they are struggling to grow at the pace required to achieve its 5% goal.
In the meantime, AUD/USD traders are eyeing the release of US inflation figures, with the Consumer Price Index (CPI) expected to rise 0.2% MoM, above the last month’s figure, while on an annual basis is estimated to drop to 3.1% from 3.2% in October. Core inflation is projected to climb in monthly figures, while on yearly data, is expected to stay pat at 4%.
On Australia, the docket will feature the Westpac Consumer Confidence, alongside a speech of the Reserve Bank of Australia (RBA) Governor Michele Bullock.
AUD/USD Price Analysis: Technical outlook
The AUD/USD daily chart portrays the pair is trading sideways, though tilted to the downside as it trades below the 200-day moving average (DMA). Despite that, sellers must reclaim the November 6 swing high at 0.6522, so that could cement the bearish bias, as traders will target a drop to the 100-DMA at 0.6463, ahead of the 50-DMA at 0.6448. On the other hand, upside risks remain if AUD/USD stays above the 200-DMA at 0.6574.
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
