FxWirePro: AUD/USD subdued following bigger-than-expected drop in China PPI data

AUD/USD chart - Trading View 

AUD/USD was trading largely muted as the antipodeans remain under pressure after the release of downbeat China PPI data.

Continued deflation in China factory-gate prices does not bode well for commodity currencies and risk assets. 

Data released early today showed China's producer price index (PPI), which measures costs for goods at the factory gate fell by 3.7% y/y in June, missing expectations for a rise to -3.2% and compared to May’s reading of -3.7%.

Meanwhile, China's consumer price index (CPI) also declined by 0.1% m/m in June, missing the expected rise to 0% and compared to a prior reading of -0.8%.

Technical bias is bullish, but bearish pressures around the Aussie dollar likely to keep upside limited. The pair could extend gradual grind higher to test June 10th high at 0.7064.

21-EMA is strong support at 0.69. Minor weakness to continue on break below. Major weakness only below 200-DMA.

Major Support: 0.69 (converged 20-DMA and 21-EMA)

Major Resistance: 0.7064 (June 10 high)