The AUDUSD pair rose on Monday and was seen trading 0.25% stronger during the London session, with the Aussie hovering around 0.7125.
Earlier in the session, the Chinese CPI inflation for the month of August rose notably from 2.1% to 2.3% year-on-year, also surpassing analysts’ expectations of a 2.2% print. The monthly change also accelerated to 0.7% from 0.3% scored previously. In addition, the PPI inflation decelerated from 4.6% to 4.1%, but managed to beat the consensus as well.
Sentiment appears positive on Monday as stocks are rising and the US dollar has been losing broadly, with the current relief rally on the AUDUSD pair poised to continue throughout the day.
The Aussie is recovering from a steep Friday’s sell-off and the first strong resistance is at the broken trend line around 0.7135. Should the pair jump beyond this resistance, further momentum toward the previous lows of 0.72 could occur.
On the downside, if bears will prevail again, the first support is at the current cycle lows at 0.71 and if not held, the AUDUSD pair could very well drop to the psychological level of 0.70.