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How Could China CPI Affect AUD/USD

When is China CPI/PPI and how could it affect AUD/USD?

Thursday’s Asian session will offer China’s latest Consumer Price Index (CPI) and Producer Price Index (PPI) figures for March month at 01:30 GMT.

China CPI/PPI overview

China’s annualized CPI reading is expected to increase to 2.4% from 1.5% with PPI YoY likely rising to 0.4% from 0.1%. On an MoM basis, CPI is forecast to tick down from 1.0% to -0.2% for March. Recent improvements in China data and a likely trade deal between the US and China could get additional support to boost the Australian Dollar if headline inflation data follow the suit.
Barclays and Westpac had their own forecasts spread out ahead of the release. While Barclays expect an uptick in the headline inflation numbers, Westpac expects price pressures remaining contained.

How could it affect the AUD/USD?

The latest positive pattern from Australian and Chinese data, coupled with developments at the US-China trade negotiations, has been praising the Australian Dollar (AUD), strong headline economics from its largest consumer can strengthen the AUD, also known as Aussie.

It should also be noted that Australia’s consumer inflation expectations for April, up for release at 01:00 GMT on Thursday, could also affect the AUD/USD moves. The reading last came in at 4.1%. However, the main focus of the market will be on China’s inflation numbers as the dragon nation is Australia’s largest consumer.

Should there be an uptick in headline inflation numbers, the AUD/USD pair may rise further towards 0.7200 resistance-confluence, comprising 200-day simple moving average (SMA) and a downward sloping trend-line stretched since June 2018. It should also be noted that the pair’s successful break of 0.7200 enables it to challenge 0.7235 while targeting 0.7310 resistance.

On the contrary, weak data can fetch the quote back to 100-day SMA level of 0.7145 ahead of highlighting 0.7130 and 0.7110 comprising 50-day SMA.

Article by FXStreet