AUD/USD climbs back closer to multi-week tops, around 0.6870 region

• Softer Chinese PPI/Aussie data-led early downtick turns out to be short-lived.
• A subdued USD price action/US-China trade optimism helped regain traction.
• The near-term set-up might have already shifted in favour of bullish traders.

The AUD/USD pair quickly reversed an early dip to mid-0.6800s and is currently placed at the top end of its daily trading range, closer to six-week tops set on Monday.
 
The pair witnessed a modest pullback during the Asian session on Tuesday following the release of a dismal producer price index (PPI) from China, which fell 0.8% in August from a year earlier and marked its worst year-on-year contraction in three-years.

US-China trade optimism attracts some dip-buying interest

The downbeat PPI print overshadowed slightly better-than-expected Chinese consumer price index, which coupled with a further deterioration in the Australian business conditions index exerted some pressure on the China-proxy Australian Dollar.
 
The National Bank of Australia’s (NAB) business confidence index fell to 1 in August from the previous reading of 4, indicating that RBA rate cuts have failed to lift the sentiment and raising prospects for more aggressive easing in the near future.
 
However, a subdued US Dollar demand, which failed to extract any support from a follow-through uptick in the US Treasury bond yields, coupled with the latest US-China trade optimism helped limit the downside, at least for the time being.
 
From a technical perspective, the pair is now looking to find acceptance above 50-day SMA, which should pave the way for further recovery from multi-year lows amid absent relevant market moving economic releases from the US.

Technical levels to watch