- AUD/USD stages a modest recovery from the weekly low touched on Wednesday.
- A modest USD downtick is seen as a key factor lending some support to the major.
- Spot prices react little to rather unimpressive Chinese inflation figures for October.
The AUD/USD pair attracts some buying during the Asian session on Thursday and for now, seems to have snapped a three-day losing streak to the weekly low touched the previous day. Spot prices hold steady just above the 0.6400 mark and move little following the release of Chinese inflation figures.
The National Bureau of Statistics of China reported that the headline CPI fell 0.1% in October and the yearly rate declined by 0.2%, both missing consensus estimates. Meanwhile, China’s producer price index (PPI) dropped 2.6% YoY in October, pointing to sustained disinflationary pressures in the wake of the worsening economic conditions. The AUD/USD pair, however, stick to its modest intraday gains and continues to draw some support from a mildly softer tone surrounding the US Dollar (USD).
That said, the uncertainty over the Federal Reserve’s (Fed) future rate-hike path might hold back traders from placing aggressive USD bearish bets. Apart from this, expectations that additional rate hikes by the Reserve Bank of Australia (RBA) might be off the table might contribute to keeping a lid on the AUD/USD pair. This makes it prudent to wait for strong follow-through buying before confirming that the recent pullback from a near three-week high touched on Monday has run its course.
Technical levels to watch