FxWirePro: AUD/USD rangebound around 0.71 handle, Aussie ignores upbeat China inflation data

AUD/USD chart on Trading View used for analysis

• AUD/USD largely muted despite upbeat China inflation data. Pressure on the downside on the back of the Friday's upbeat US jobs report. 
   
• Data on Friday showed the US economy added 201K jobs in August, surged from July’s 147K (revised downwards from 157K), beating expectations of 191K.
   
• Rising Treasury yields and Trump's threat to up the ante in the trade war with China also weigh. USD200-467bn of 25% tariffs on China could come slamming down at any moment.
   
• China CPI rose 2.3 percent y/y in August, beating estimates for a rise of 2.1 percent and compared to a 2.1 percent rise in July. 
   
• Meanwhile, PPI, fell to 4.1 percent in August from the July print of 4.6 percent but still bettered estimates of 4.1 percent. The drop in the PPI could add to the bearish tone around the Aussie dollar.
   
• Technical studies are bearish. Price action has broken strong support at Wedge base at 0.7155. Scope for test of 88.6% Fib at 0.6976.
   
• Focus now on Australian jobs report (Thursday). A positive reading on the Aussie employment figures could spur on some bullish movement. 

Support levels - 0.7016 (Nov 2015 low), 0.70, 0.6976 (88.6% Fib)

Resistance levels - 0.7155 (Wedge base), 0.7153 (5-DMA), 0.7247 (21-EMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-USD-finds-strong-support-at-07155-focus-on-US-NFP-data-for-further-impetus-1425746) has hit all targets.

Recommendation: Stay short on upticks, SL: 0.7155, TP: 0.7020/ 0.70/ 0.6975

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -57.9543 (Neutral), while Hourly USD Spot Index was at 10.5304 (Neutral) at 0300 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.