AUD/USD bulls struggle to make it through 100-DMA barrier

   “¢   Softer Chinese inflation figures/fading US-China trade optimism prompts some profit-taking.
   “¢   Dovish FOMC minutes helped limit further downside, through risk-off mood capped gains.
 
The AUD/USD pair reversed an early Asian session dip to 0.7145 area and is currently placed just a few pips away from 2-1/2 week tops, set in the previous session.

The latest optimism over the US-China trade talks seems to have faded and today’s softer than expected Chinese inflation figures exerted some downward pressure on the China-proxy Aussie.

The downtick, however, remained cushioned amid persistent selling bias around the US Dollar, which remained on the defensive through the Asian session in wake of the overnight release of dovish FOMC meeting minutes.  

The minutes of the December meeting reinforced market expectations that the Fed might halt its monetary policy tightening cycle in 2019 and added to the already weaker sentiment surrounding the buck.  

With investors still digesting the latest update on the central bank’s policy outlook, the prevalent risk-off mood benefitted the greenback’s relative safe-haven appeal against its Australian counterpart and kept a lid on any further up-move.

The pair struggled to make it through 100-day SMA and now look forward to scheduled speeches by influential FOMC members, including the Fed Chair Jerome Powell, for some fresh impetus.

Technical levels to watch

On a sustained move beyond the mentioned barrier, and the 0.7200 handle, the pair is likely to aim towards testing the 0.7230-40 supply zone. Alternatively, rejection slide from the current resistance zone, leading to a subsequent break through the 0.7150-45 immediate support, might prompt some profit-taking and drag the pair back towards the 0.7100 neighborhood.