AUD/USD Price Analysis: Bears keep the reins near 0.6950 on downbeat China inflation data

AUD/USD retreats from intraday high surrounding 0.6950 on downbeat China inflation numbers during early Friday. That said, the softer China Consumer Price Index (CPI) and Producer Price Index (PPI) data for January helped bears to cheer the previous day’s confirmation of bearish bias, via the downside beak of the weekly bullish channel and a U-turn from the 200-Hour Moving Average (HMA).

China CPI eased to 2.1% YoY versus 2.2% market forecasts, compared to 1.8% prior, while the PPI dropped heavily to -0.8% YoY from -0.7% previous readings and -0.5% consensus.

Also read: China Consumer Price Index a touch lower than estimates, AUD eyed for reaction

It should be noted that the 50-HMA joins the aforementioned bullish channel’s lower line to restrict the immediate upside of the Aussie pair to around 0.6960. Adding strength to the downside bias are the bearish MACD signals and the downbeat RSI (14), not oversold.

Even if the quote rises past the 0.6960 hurdle, the 200-HMA near the 0.7000 round figure and an upward-sloping resistance line from Tuesday, close to 0.7015 at the latest, could challenge the AUD/USD buyers.

In a case where the AUD/USD pair remains firmer past 0.7015, the odds of witnessing a run-up toward the aforementioned channel’s top near .7050 can’t be ruled out.

Alternatively, the 0.6900 round figure and the weekly low near 0.6855 lure the AUD/USD bears as of late.

Should the Aussie pair remains weak past 0.6855, the odds of witnessing a south-ward trajectory targeting the previous monthly low near 0.6685 can’t be ruled out.

AUD/USD: Hourly chart

Trend: Further downside expected