AUD/USD bulls soak up pre-Chinese data

FXStreet (Guatemala) - AUD/USD bulls are enjoying a respite from the commodities selloff, the potential of a better bid day with a head start on the back of the home loans beating expectations -0.5% vs -1.0% m/m. However, the consumer confidence was a slight disappointment for Dec at 100.8 vs prior 101.7.

However the main event should come in the Chinese CPI's. "The Chinese November CPI and PPI data will be reported at 01.30GMT, with the consensus forecasts for CPI seen higher at 1.4% versus 1.3% reported in Oct. While the factory gate prices are expected to fall further to -6.0% compared to -5.9% seen previously.

Should the CPI miss expectations, we could see a sharp sell-off across the financial markets as the poor data would reinforce China slowdown fears and spur a renewed bout of risk-aversion," explained Dhwani Mehta, analyst at FXStreet.

Technically, Classic S1 stands at 0.7156, however, this is below the 100 DMA at 0.7190 coming in as a critical level on overnight lows. 0.7180 is the point at which the price rallied in late November trade to recent highs and should be a strong level of support. Below it lies the 0.7017 November low and the September low at 0.6940. On the upside, there are bearish pressures before 0.7451 200 DMA and hard work getting there.