AUDUSD retreated from 0.6800, owing to higher Australian Consumer Inflation Expectations and lower China CPI/PPI

The AUDUSD eases off the intraday high but is on track to reverse the previous day’s drop from the 11-week high.

AUDUSD reverses from an intraday high around 0.6800 as bulls struggle to applaud positive inflation data from Australia. In the face of mixed China data issued early Thursday. However, weaker US inflation and hawkish sentiments in Reserve Bank of Australia (RBA) papers obtained. Through a Freedom of Information (FOI) request have Aussie pair purchasers optimistic.

China’s CPI rises month on month but falls year on year in April.

China’s headline Consumer Price Index (CPI) falls to 0.1% YoY from 0.7% before, vs 0.3% predicted, while the Producer Price Index (PPI) falls to -3.6% YoY from -3.2% previously and -2.5% previously. Earlier in the day, Australia’s Consumer Inflation Expectations for May increased to 5.0% from 4.6% the previous month.

Softer US inflation figures, as well as freshly released hawkish RBA papers, support Aussie bulls ahead of US PPI.

It is worth mentioning that the RBA records demonstrate that the Aussie central bank follows a 4.8% policy rate. In late-2024, cash rates indicate that inflation will be at target.

In other news, market sentiment improves as weaker US inflation data weighs on the Fed’s hawkish bets. The US authorities’ plans to escape the debt ceiling expiry, despite failure in the original attempt, add to the cautious optimism. Furthermore, prospects of a meeting between US and Chinese authorities, as well as Australia’s willingness to have strong connections with China, reinforce the somewhat optimistic attitude and the risk barometer pair’s rise.

Among these trades, the S&P 500 Futures print modest gains, while US Treasury bond yields prolong the previous day’s negative performance, weighing on the US Dollar Index (DXY) and putting a floor under the AUDUSD price.

Following the initial market reaction to the Australian and Chinese inflation indications, AUDUSD traders should focus on risk triggers for intraday movement ahead of the US Producer Price Index (PPI) for April, which is predicted to fall to 2.4% year on year.

To maintain control, AUDUSD bulls require a daily close above the two-month-old rising resistance line at 0.6820.

AUDUSD Technical levels