AUDUSD retreats from 0.6700 as China inflation easesAUDUSD consolidates the first weekly gain in three as softer inflation numbers from the biggest customers, namely China, drag the quote from a fortnight-old falling resistance line, around the 0.6700 round figure. The pullback move also retreats as the RSI eases from the overbought territory, which in turn suggests the Aussie pair’s further weakness towards the 61.8% Fibonacci retracement of May-Jun upside, near 0.6630. However, a horizontal area comprising multiple levels marked since June 01, close to 0.6585-95, appears a tough nut to crack for the bears. In a case where the sellers dominate past 0.6585, the odds of witnessing a slump toward the late May swing low of around 0.6458 can’t be ruled out.
Meanwhile, the aforementioned two-week-long descending resistance line around 0.6700 guards the immediate upside of the AUDUSD pair ahead of the 100-SMA hurdle surrounding 0.6715. Following that, the late June high of near 0.6720 and 23.6% Fibonacci retracement level of near 0.6800 can challenge the risk-barometer pair’s upside before directing the bulls toward the previous monthly high of around 0.6900.
Overall, AUDUSD’s previous weekly gain appears a one-off affair unless the US inflation signals keep softening.
