• AUD/USD remains pressured for the second consecutive day, recently pushed by China inflation data.
  • China CPI, PPI rose less than market forecasts in July.
  • Risk appetite remains dicey ahead of the US inflation data, US dollar traces sluggish yields.
  • Firmer US CPI could joins hawkish Fedspeak to underpin USD run-up.

AUD/USD holds lower ground near 0.6960 during Wednesday’s Asian session, justifying the downbeat inflation data from China. In addition to China CPI and PPI data, cautious mood ahead of the US inflation numbers and fears of economic recession also weigh on the Aussie pair.

China’s headline Consumer Price Index (CPI) eases to 2.7% YoY in July versus 2.9% expected and 2.5% prior. Further, the Producer Price Index (PPI) dropped to 4.2% compared to 8.0% market forecasts and 6.1% previous readings.

Wall Street’s downbeat performance, as well as a rebound in the US 10-year Treasury yields to 2.79%, portrays the sour sentiment. Further, S&P 500 Futures also print mild losses at around 4,120 by the press time and teases the AUD/USD bears, due to the pair’s risk barometer status.

It’s worth noting that chatters surrounding an economic slowdown recently weighed on the risk profile, especially after Russia halted oil supplies. “Russia reportedly suspended oil flows via the southern leg of the Druzhba pipeline, amid transit payment issues,” said Reuters.

Elsewhere, Fed's St. Louis president James Bullard said on Tuesday that he wants rates at 4% by the end of the year. This joins nearly recently firmer interest rate futures suggesting nearly 70% odds favoring the 75 basis points (bps) of a Fed rate hike in September.

Moving on, AUD/USD traders may witness a sluggish session ahead of the US CPI, expected to ease to 8.7% from 9.1% on YoY. However, risk catalysts may entertain the pair traders. Also important to watch will be the CPI ex Food & Energy which is likely to rise from 5.9% to 6.1%.

Technical analysis

Impending bear cross of the MACD and steady RSI to direct AUD/USD sellers towards the 50-DMA retest, around 0.6850 at the latest.

Additional important levels

Overview
Today last price 0.6958
Today Daily Change -0.0007
Today Daily Change % -0.10%
Today daily open 0.6965
 
Trends
Daily SMA20 0.6916
Daily SMA50 0.6946
Daily SMA100 0.7096
Daily SMA200 0.7156
 
Levels
Previous Daily High 0.6995
Previous Daily Low 0.6952
Previous Weekly High 0.7048
Previous Weekly Low 0.6869
Previous Monthly High 0.7033
Previous Monthly Low 0.668
Daily Fibonacci 38.2% 0.6968
Daily Fibonacci 61.8% 0.6979
Daily Pivot Point S1 0.6946
Daily Pivot Point S2 0.6928
Daily Pivot Point S3 0.6903
Daily Pivot Point R1 0.6989
Daily Pivot Point R2 0.7014
Daily Pivot Point R3 0.7032

 

 

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