AUD/USD seesaws around 0.7150 as China CPI missed the marks but PPI matched expectations

• The mixed release of China’s inflation numbers shift market focus on to speech from RBA’s Debelle.
• The range between 0.7175 and 0.7145 is likely limiting the quote’s short-term moves.

AUD/USD is trading near 0.7165 during early Thursday. The pair recently witnessed positive push on the upbeat signals from the US-China trade data and welcome inflation expectations at home but mixed signals from the China’s inflation number questioned the moves.

China’s headline consumer price index (CPI) lagged behind 2.4% market consensus and 1.5% prior to 2.3% on yearly basis while declining to -0.4% from +1.0% previous and -0.2% expectations on MoM. However, Producer Price Index (PPI) matched 0.4% market forecast on YoY compared to +0.1% previous.

The pair previously rose to six-week high as the US and China inched close towards the much-awaited trade deal as they announced the opening of enforcement offices in respective countries. However, traders turn cautious after soft print of consumer inflation expectations to 3.9% from 4.1% for April. Adding to the sentiment was risk-off ahead of the key inflation data from China as it is an important factor from their largest customer.

Having witnessed initial response to China’s headline inflation numbers, traders may now aim for the speech from the RBA’s Debelle as well as the US initial jobless claims for further clues.

RBA’s Assistant Governor sound mostly upbeat during his appearance on Wednesday while praising economic developments and labor market. However, challenges to the global economy and openness to alter monetary policy were also conveyed. As a result, investors will look for signs of further monetary policy direction. The US initial jobless claims for the week ended on April 05 could increase to 211K from 202K prior. 

It should also be noted that further developments surrounding the on-going trade negotiations between the US and China could also become an important catalyst for the AUD/USD pair traders.

AUD/USD Technical Analysis

The break of 0.7150-45 confluence (now support) comprising 100-day SMA and seven-week-old descending trend-line, should clear another downward sloping resistance-line ranging from December 2018 at 0.7175 in order to aim for 200-day simple moving average (SMA) level of 0.7200. Also, the break of 0.7200 could fuel the pair towards 0.7235/40.

On the downside break of 0.7145, the Aussie can revisit 50-day SMA level of 0.7115 while an ascending trend-line from March 08 could challenge sellers around 0.7070.