AUD/USD Price Analysis: Bears Resume Amid Poor Chinese Data

• The Australian dollar declined due to a surprise deterioration in Chinese factory activity.

• In April, Australian consumer prices rose more than anticipated.

• There are concerns about China’s struggling post-pandemic recovery.

Today’s AUD/USD price analysis is bearish. On Wednesday, the Australian dollar declined due to a surprise deterioration in Chinese factory activity. This raised concerns about China’s struggling post-pandemic recovery. 

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Additionally, the Australian dollar experienced a volatile ride following the release of intense local inflation data. Initially, the Aussie surged by 0.33% as the likelihood of more central bank tightening increased. However, moments later, it quickly reversed course and declined by 0.38% due to escalating worries about a slowdown in China. The decline deepened to 0.46%, reaching its lowest point since November 10. 

In April, Australian consumer prices rose more than anticipated, primarily driven by a surge in automotive fuel prices. This suggests that persistent inflation puts pressure on the central bank.

Data from the Australian Bureau of Statistics revealed that the monthly consumer price index increased by 6.8% in the year up to April. This was higher than the previous month’s 6.3% and exceeded market forecasts of 6.4%. 

Elsewhere, China’s factory activity in May contracted more rapidly than expected due to weakening demand. This added pressure on policymakers to strengthen the country’s inconsistent economic recovery and led to a decline in Asian financial markets.

On Wednesday, the National Bureau of Statistics reported that the official manufacturing purchasing managers’ index dropped to a five-month low of 48.8. Although the second-largest economy in the world is emerging from three years of pandemic-related lockdowns, the recovery has been uneven. 

AUD/USD key events today

Investors are expecting the US JOLTs job openings report. This report will measure job vacancies in the US, indicating the state of the labor market.

AUD/USD technical price analysis: Bears determined to make new lows below 0.6500.

AUD/USD is crossing below the key support level at 0.6500, strengthening the bearish bias on the 4-hour chart. The price is pushing off the 30-SMA resistance while the RSI looks ready to enter the oversold region.

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A close below the 0.6500 support level would allow bears to reach the next level at 0.6450. Given the strong downtrend, the price will likely take out the 0.6450 support as well. The bearish bias will hold if bulls cannot push above the 30-SMA.

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