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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.

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 price0.7413
Today Daily Change3 pips
Today Daily Change %0.04%
Today daily open0.741
 
Trends
Daily SMA200.7344
Daily SMA500.7225
Daily SMA1000.7215
Daily SMA2000.6886
 
Levels
Previous Daily High0.7436
Previous Daily Low0.7398
Previous Weekly High0.745
Previous Weekly Low0.7338
Previous Monthly High0.7438
Previous Monthly Low0.699
Daily Fibonacci 38.2%0.7413
Daily Fibonacci 61.8%0.7422
Daily Pivot Point S10.7394
Daily Pivot Point S20.7377
Daily Pivot Point S30.7356
Daily Pivot Point R10.7431
Daily Pivot Point R20.7452
Daily Pivot Point R30.7469

Author

Anil Panchal

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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