FxWirePro: AUD/USD extends mild recovery despite poor China data, focus on FOMC decision for impetus

AUD/USD chart - Trading View 

AUD/USD has resumed gradual upside despite poor data. All eyes on the Fed's interest rate decision for impetus.

The pair seems to pay a little heed to China’s downbeat data as it extends the previous day’s recovery moves from 0.6898.

AUD/USD was trading largely unchanged at 0.6958 at around 02:30 GMT, up from session lows at 0.6932.

Data released earlier today showed China’s Consumer Price Index (CPI) and Producer Price Index (PPI) extended the previous two-month weakness during May.

The headline CPI slipped to -2.4% YoY more than 2.7% forecast whereas the PPI declined further below -3.3% anticipated fall to -3.7% on a yearly basis.

The pair is extending in a Rising Channel pattern and is being capped at channel from the past few sessions. Upside continuation only on break above. 

Technical analysis shows highly overbought conditions on oscillators. A pullback looks imminent.

Downside remains supported at 110H EMA. Further weakness only below 200H MA. Breach below could see dip till 0.6745 (channel base).

All eyes on the Fed's interest rate decision for direction. The US Federal Reserve is not expected to alter its benchmark Fed rate.

Markets shall watch for the quarterly rate projections and economic forecasts, followed by Chairman Jerome Powell’s speech.

Summary: The pair retains an upside bias as price action grinds higher in 'Rising Channel' pattern. Overbought conditions may cause some weakness, but pullbacks are likely to be shallow. Price action hovers around 110W EMA. Resumption of upside will see test of 200W MA at 0.7280.