AUD/USD Bulls Relieved on China Data
AUD/USD is little changed on the release of the Chinese CPI and PPI data and the bulls can relax. Chinese producer price index y/y for Feb came in line with expectations of -4.9% vs -5.3% prior. The consumer price index mom for Feb beat expectations of 1.1% arriving actual at 1.6% vs 0.5% previous.
The data has propped up the bid appeal in AUD/USD that has been in a recovery from 0.,6827 lows on the 14th Jan after the Chinese debacle that took the major commodity currency down from the vicinity of the 0.73 handle at the start of the year.
A timely recovery in commodities for AUD bulls
With the price through the 200 dma at 0.7250 today and having made highs of 0.7527, the price is in key territory and the next move in one direction or another will be pivotal. Commodity markets continue to recover, with Iron ore volatility in a 6.5% range overnight, and 16% up on the week while oil trades above $38 bbl and copper testing the 200 dma at 2.2776.
The recovery in commodities is timely, considering the huge 25% y/y differential in Chinese exports shown in the trade balance earlier in the week, that night have otherwise sent the Aussie in a spiral to the downside.
AUD/USD levels
AUD/USD is technically in bullish territory with a bullish bias while holding above the 0.74 handle. However, a sell-off that penetrates that level with daily closes below the base of the weekly cloud at 0.7378 could be damaging to the recovery leading to a deeper correcting back to the 200 dma at 0.7250 and resulting in a reversal of the bull trend.
On the other hand, continued demand brings in the 0.7534 level and the March 2015 low. "Currently if we assume that it has based the measurement higher extends to 0.7760," explained Karen Jones, chief analyst at Commerzbank.
(Market News Provided by FXstreet)
