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AUD/USD picks up bids above 0.7200 as China CPI matches forecasts

  • AUD/USD probes intraday high after China’s August month inflation data matched downbeat forecast.
  • Market sentiment remains sluggish despite light news feed, AstraZeneca’s clarification on vaccine trial halt.
  • Second-tier US data may entertain short-term traders but risk catalysts to keep the driver’s seat.

AUD/USD rises to 0.7220, up 0.08% on a day, after China data on early Wednesday. The Aussie pair previously dropped to the two week low as risk aversion kept the throne. Also weighing on the quote was the broad US dollar strength.

China’s August month Consumer Price Index (CPI) matched 2.4% YoY expectations while the Producers Price Index eased from -2.4% prior to -2.0% while proving the market consensus right. It should also be noted that Australia’s Home Loans surged 10.7% versus 3.1% forecast in July. Earlier during the day, Australia’s Westpac Consumer Confidence for September reversed the -9.5% previous reading with a +18% mark. While reacting to the data, AUD/USD extends consolidation from a two-week low after the releases.

Read: China's August CPI showing continuing modest inflationary pressures, 2.4%

Risk-tone sentiment also plays a role in the pair’s recent pullback. AstraZeneca termed the latest halt in final trials of the coronavirus (COVID-19) vaccine as “routine and voluntary” after news of the halt earlier favored the risk-off mood.

However, there are around nine drugmakers that recently stopped further trials unless finding the “safe” research results. Also on the negative side could be the on-going Sino-American tussle and uncertainty over the US stimulus bill, not to forget Brexit woes.

US President Donald Trump promised to “stand tough on China”, if he is re-elected, whereas Republicans’ bid of $300 billion for the COVID-19 aid package that was termed “an insult to American people” by House Speaker Nancy Pelosi. Brexit talks are in limbo as the UK prepares to alter the Withdrawal Agreement and the European Union (EU) hates it.

Against this backdrop, Australia’s ASX 200 drops over 2.0% while S&P 500 Futures trim early day losses to regain the 3,335 level. Further, the US 10-year Treasury yields decline 1.2 basis points to 0.67% by the press time.

Moving on, the economic calendar turns mostly silent in Asia and hence the risk catalyst, discussed above, will be the key to watch. Even so, US JOLTS Job Openings may offer intermediate moves.

Technical analysis

Not only an ascending trend line from June 30, at 0.7220 now, but an upward sloping resistance line from May 15, currently around 0.7255/60, also challenges the bulls. Meanwhile, 0.7135-34 support confluence including 50-day SMA and August 20 low remains in the spotlight.

Additional important levels

Overview
Today last price0.7214
Today Daily Change0.0000
Today Daily Change %0.00%
Today daily open0.7214
 
Trends
Daily SMA200.7241
Daily SMA500.7136
Daily SMA1000.6906
Daily SMA2000.675
 
Levels
Previous Daily High0.7309
Previous Daily Low0.721
Previous Weekly High0.7416
Previous Weekly Low0.7222
Previous Monthly High0.7416
Previous Monthly Low0.7076
Daily Fibonacci 38.2%0.7248
Daily Fibonacci 61.8%0.7271
Daily Pivot Point S10.7179
Daily Pivot Point S20.7145
Daily Pivot Point S30.708
Daily Pivot Point R10.7279
Daily Pivot Point R20.7344
Daily Pivot Point R30.7379

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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