AUD/USD holds 0.7400 despite mixed China inflation data amid mild risk-on

AUD/USD refrains from declining after weaker than forecast China CPI/PPI.
China’s CPI drops to -0.5% YoY, PPI recovered to -1.5% in November, Aussie Westpac Consumer Confidence rose 4.1% for December.
Risk barometers stay mildly positive despite mixed signals on US stimulus, Brexit.
Headlines relating to US aid package, Brexit and vaccine become the key.

Anil Panchal FXStreet

AUD/USD picks up bids around 0.7415 even as China’s inflation figures fail to please the bulls during early Wednesday. The reason could be traced from the market’s cautious optimism concerning the US stimulus and the covid vaccine.

China’s November month Consumer Price Index (CPI) dropped below 0.5% prior and 0.0% forecast to -0.5% on a yearly basis. Though, the Producer Price Index (PPI) recovered from -2.1% previous readouts and -1.8% expected to -1.5% YoY.

Read: China's November Consumer Price Index weaker at -0.5%, first decline since Oct 2009

During the early Asian trading, Australia’s Westpac Consumer Confidence for December rose past-2.5% to 4.1%.

Market’s trading sentiment recently wobbled, despite staying mostly positive, off-late after US House Speaker Nancy Pelosi and House Democrat Leader Chuck Schumer said that the White House plan of the coronavirus (COVID-19) aid package is unacceptable. Earlier in the day, US Treasury Secretary Steve Mnuchin proposed $916 billion as a total outlay for the stimulus versus the previous bipartisan suggestion of $908 billion.

It should be noted that the UK’s vaccination and hopes of legal approval to the headlines covid vaccines by the other developed countries keep the mood lighter even as the US registered record infections and virus-led death toll the previous day. Also challenging the risks could be the uncertainty surrounding Brexit and the Sino-American tussle, not to forget the Aussie-China tension.

Amid these plays, S&P 500 Futures hover around the record high above 3,700 whereas stocks in Asia-Pacific print gains above 0.50% on an average by press time.

Moving on, a light calendar can keep the AUD/USD pair traders directed towards the risk news for fresh impulse. In doing so, US stimulus headlines and vaccine news will be important to watch.

Technical analysis

The 0.7450/55 area including Thursday’s top and August 2018 high seems to challenge AUD/USD buyers while a confluence of the 12-day-old ascending trend line and 10-day SMA highlights 0.7400/7395 acts as the strong short-term support.

Additional important levels

Overview
Today last price	0.7413
Today Daily Change	3 pips
Today Daily Change %	0.04%
Today daily open	0.741

Trends
Daily SMA20	0.7344
Daily SMA50	0.7225
Daily SMA100	0.7215
Daily SMA200	0.6886

Levels
Previous Daily High	0.7436
Previous Daily Low	0.7398
Previous Weekly High	0.745
Previous Weekly Low	0.7338
Previous Monthly High	0.7438
Previous Monthly Low	0.699
Daily Fibonacci 38.2%	0.7413
Daily Fibonacci 61.8%	0.7422
Daily Pivot Point S1	0.7394
Daily Pivot Point S2	0.7377
Daily Pivot Point S3	0.7356
Daily Pivot Point R1	0.7431
Daily Pivot Point R2	0.7452
Daily Pivot Point R3	0.7469

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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