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FxWirePro: AUD/USD erases early gains, poised for further weakness

AUD/USD chart - Trading View 

Spot Analysis:

AUD/USD was trading unchanged at 0.7398 at around 04:50 GMT.

Session High/ Low: 0.7416/ 0.7386

Previous Week's High/ Low: 0.7536/ 0.7359

Previous Session's High/ Low: 0.7412/ 0.7359

Fundamental Overview:

Caution prevails in the markets ahead of inflation data from the United States and China this week.

Figures due Wednesday are expected to show U.S. consumer price at 5.8% year-on-year, supporting the Federal Reserve's intent to be patient with interest rate hikes.

Traders are also look forward to Chinese producer and consumer price data due on Wednesday, with annual producer price growth seen surging to 12%.

Iron ore futures edged lower on Monday, as benchmark prices collapsed under $100 a tonne due to weak Chinese demand, weighing on the Aussie.

Technical Analysis:

- AUD/USD grinds lower despite Doji formation in the previous session

- The pair hovers around 21-EMA, decisive close below will see more weakness

- 5-DMA caps upside in the pair, is sharply lower

-  Momentum is strongly bearish, RSI is below the 50 mark

Major Support and Resistance Levels:

Support - 0.7365 (50-DMA), Resistance - 0.7413 (5-DMA)

Summary: AUD/USD trades with a bearish bias. Scope for further downside. Bears target 50-DMA at 0.7365.
 

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