• Chinese PPI helps offset a modest pickup in the US bond yields.
• Concerns over US tax bill remains supportive of the up-move.
The AUD/USD pair built on previous session's strong up-move and has now moved back closer to the very important 200-day SMA immediate strong hurdle.
Currently trading around 0.7690 level, testing session tops, the pair extended overnight rebound from multi-month lows support and got an additional boost from today's better-than-expected Chinese PPI print for October.
China’s Producer Price Index arrived at 6.9% y-o-y (6.6% expected) and helped offset softer headline CPI print, coming in at 0.1%, as compared to 0.2% anticipated and 0.5% last, which eventually underpinned the China-proxy Australian Dollar.
• China's Oct CPI mixed, PPI surprises to the upside
Meanwhile, mounting uncertainty over the US tax reforms plan kept the US Dollar bulls on the defensive and remained supportive of the pair's up-move through the early European session. The long-awaited US tax bill would remain in focus as investors brace for the release of the legislation text, expected to be revealed later on Thursday.
It, however, remains to be seen if bulls can maintain their dominant position or the pair once again meets with some fresh supply near the 0.7700 handle amid a goodish pickup in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie.
Technical levels to watch
Immediate upside hurdle remains near the 0.7700 handle, above which a fresh bout of short-covering is likely to accelerate the up-move towards 0.7730 level ahead of 0.7750-55 resistance.
On the downside, 0.7655 level now becomes immediate support, which if broken could drag the pair back towards 0.7625 horizontal support en-route the 0.7600 handle and 0.7580-75 zone.
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 assets. 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 Open Markets 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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.