The AUDUSD currency pair at a rate of 0.66823 faced selling pressure, causing a reversal of the recovery it had made in the previous day due to events in China.

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• AUD/USD takes offers to reverse the previous day’s China-inspired recovery.

The pair currently trades last at 0.66823.

The previous day high was 0.6694 while the previous day low was 0.6668. The daily 38.2% Fib levels comes at 0.6678, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6684, expected to provide resistance.

AUD/USD portrays the typical pre-data consolidation as it drops to 0.6680 ahead of Australian inflation on early Wednesday. In doing so, the Aussie pair also bears the burden of the risk-negative headlines surrounding China, as well as hawkish Federal Reserve (Fed) concerns before an important speech from Fed Chair Jerome Powell.

While talking about China, Australia’s biggest customer, US President Joe Biden said late Tuesday that China has enormous problems. His comments were joined by the Wall Street Journal (WSJ) news saying, “The Biden administration is considering new restrictions on exports of artificial intelligence chips to China, as concerns rise over the power of the technology in the hands of US rivals, according to people familiar with the situation.”

Previously, headlines suggesting Asian lobbyists are advocating for easier rules for Chinese equities’ overseas listing and comments from Premier Li Qiang joined the People’s Bank of China’s (PBoC) lower-than-expected fixing of the USD/CNY price to favor the AUD/USD. Further, the US Dollar selling by major Chinese state banks, per Reuters, also allowed the Aussie pair to remain firmer.

However, the recent jump in the hawkish Fed bets, as well as the US Treasury bond yields, backed by the US data, weigh on the AUD/USD price of late. That said, US Durable Goods Orders marked a surprise growth of 1.7% for May versus -1.0% market forecasts and 1.2% prior (revised). Further, the US Conference Board’s (CB) Consumer Confidence Index rose to 109.7 for June from 102.5 in May (revised from 102.3). On the same line, US Housing Price Index rose to 0.7% in April from 0.5% in previous readings (revised), versus the 0.3% expected. Meanwhile, the S&P/Case-Shiller Home Price Index came in as -1.7% YoY for April, down from -1.1% prior but better than -2.6% market forecasts. Additionally, New Home Sales rose 12.2% MoM in May from 3.5% prior and 0.5% anticipated whereas the Richmond Fed Manufacturing Index improved to -7.0 in June compared to -15.0 prior and -10.0 expected.

Amid these plays, S&P500 Futures print mild losses despite the upbeat performance of Wall Street whereas the US Treasury bond yields grind higher.

Looking ahead, Australia’s Monthly Consumer Price Index (CPI) for May, expected 6.1% YoY versus 6.8% prior, will be crucial as the same allowed the Reserve Bank of Australia (RBA) to offer two consecutive hawkish surprises. Also important to watch will be Federal Reserve (Fed) Chairman Jerome Powell’s speech at the European Central Bank (ECB) Forum in Sintra.

Ahead of the Aussie data, Analysts at the ANZ said, “As one of few who expect a hike next week, we see upside risks to AUD and NZD, especially with markets only pricing in ~1/3 odds of a hike. But that could be a story for next week if there isn’t a clear ‘smoking gun’ in today’s data. Could be a slow day!”

Repeated failures to provide a daily closing beyond the 200-DMA, around 0.6695 by the press time, keep the AUD/USD pair sellers hopeful.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6682 at the time of writing. Pair opened at 0.6675 and is trading with a change of 0.10% % .

The pair is trading below its 20 Daily moving average @ 0.6711, above its 50 Daily moving average @ 0.668 , below its 100 Daily moving average @ 0.6712 and below its 200 Daily moving average @ 0.6692

The previous day high was 0.6694 while the previous day low was 0.6668. The daily 38.2% Fib levels comes at 0.6678, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6684, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.6664, 0.6653, 0.6638
• Pivot resistance is noted at 0.669, 0.6705, 0.6717

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