China PPI rises at the fastest rate since 2008; AUD/USD is not impressed

China PPI or factory gate prices rose 7.8% y/y in February; its fastest rate since 2008. 

Weak CPI keeps Aussie flat lined

However, a weaker-than-expected CPI number ensured the AUD/USD pair remains flat lined around 0.7525 levels. The cost of living as represented by the consumer price index (CPI) came-in at 0.8% y/y; lowest since January 2015, compared to the estimated rise of 1.7%. 

Dismal CPI reading is a surprise, although it could mean the PBOC would have to do more if the disinflation tightens its grip in the near future.

AUD/USD Technical Levels

The spot is stuck between the 200-DMA level of 0.7532 and 100-DMA level of 0.7516. A daily close below 0.7516 would signal the continuation of the retreat from Feb 23 high of 0.7740 and would open doors for a sell-off to 0.7450 (50% fib retracement of 0.7160-0.7741), under which the psychological support of 0.74 would come into play. 

On the higher side, a break above 200-DMA of 0.7532 could see the spot retake 50-DMA seen at 0.7552. Violation there could yield re-test of 0.76 (zero figure).