AUD/USD meets fresh supply on softer China CPI, 50-DMA eyed

Having failed another attempt to sustain above 0.75 handle, the AUD/USD pair came under renewed selling pressure following the release of dismal Chinese CPI and PPI numbers.

AUD/USD back below 50-DMA at 0.7450

Currently, the AUD/USD pair trades -0.16% lower at 0.7476, extending its retreat from multi-week peaks reached at 0.7504 in early trades. The Aussie ran through fresh offers and keeps its corrective mode intact after the Chinese inflation data disappointed markets and reinforced belief that China is yet to come out of the persistent economic slowdown. China CPI data for May came in at +2.0% y/y versus +2.2% expected and against +2.3% previous, while the factory gate prices also missed estimates.

Markets continue to digest the latest mixed data released from the Chinese economy, as focus now shifts towards weekend’s China data dump for further momentum on the Aussie. On Wednesday, China customs revealed that exports fell 4.1% y/y in May, although matched estimates, while imports dropped just 0.4%, against a 6.8% decline expected. China is Australia’s biggest trading partner.

Meanwhile, the sentiment around oil and stock markets will continue to dominate the Aussie moves ahead of Friday’s US consumer sentiment data.

AUD/USD Levels to watch   

The pair finds the immediate resistance at 0.7500/04 (round number/ daily high) above which gains could be extended to the next hurdle located at 0.7549 (daily R2). On the flip side, the immediate support located at 0.7441/29 (50 & 5-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie 0.7407/00 (100-DMA & round figure).