AUD/USD defends support of 1-hour 50-MA as China PPI beats estimates
- Better-than-expected China Oct. PPI reading helps the AUD defend the 1-hour 50-MA support.
The post-housing data drop in the AUD/USD appears to have come to a halt at the 1-hour 50-MA level of 0.7664.
As of writing, the pair is trading at 0.7675 levels; still down 0.10 percent on the day.
China producer price index (PPI) (also known as factory gate prices) came-in at 6.9 percent y/y, beating the estimated decline to 6.6 percent. A better-than-expected PPI might put reflation trade back on investors' radar.
Thus, Aussie is trimming losses. The currency pair may revisit daily highs unless the 10-year US treasury yield starts rising in response to an upbeat China PPI figure. In such a case, the recovery in AUD/USD could stall.
AUD/USD Technical Outlook
FXStreet Chief Analyst Valeria Bednarik writes, "the 4 hours chart shows that the intraday recovery stalled right below the 23.6% retracement of its latest downward move, which is not enough to confirm more gains ahead, moreover as technical indicators lack directional strength within neutral territory. The pair could be forming a double bottom in the 0.7630 region, but the figure will be confirmed only on a break above 0.7729, the high set earlier this month."
Support levels: 0.7625 0.7590 0.7555
Resistance levels: 0.7685 0.7730 0.7770