AUD/USD bears keep 0.6870 on radar on RBA Statement of Monetary Policy, China inflation, US data in focus

• AUD/USD remains pressured around intraday low, defends latest pullback from weekly low.
• RBA SoMP signals that mindful of rise in interest rates already made, policy acts with a lag.
• US Treasury bond yields triggered recession fears and weigh Aussie pair as well.
• China CPI, early signals of the next week’s US inflation data will be crucial for immediate directions.

AUD/USD struggles for clear directions amid mixed signals from the Reserve Bank of Australia’s (RBA) Statement of Monetary Policy (SoMP) during early Friday. Adding strength to the risk-barometer pair’s inaction could be the cautious mood ahead of early signals for the US inflation, as well as China’s Consumer Price Index (CPI) and Producer Price Index (PPI) data for January.

That said, RBA SoMP revised Aussie economic forecasts and cited the need for further interest rate hikes. However, the statements like the board are mindful of rise in interest rates already made and that the policy acts with a lag seemed to have probed the AUD/USD bulls afterward.

Elsewhere, US Treasury bond yields grind higher after renewing the recession woes the previous day, which in turn exerts downside pressure on the AUD/USD prices. It should be noted that the difference between the US 10-year and 2-year Treasury bond yields turned the widest since 1980. It’s worth noting that both these key bond yields remain mostly inactive around 3.66% and 4.50% respectively by the press time.

On the positive side, US President Biden’s taming of fears emanating from the US-China jitters, following the China balloon shooting by the US, joined the hopes of People’s Bank of China’s (PBOC) rate cuts and the restart of the China-based companies’ listing on the US exchanges to put a floor under the AUD/USD price. Additionally challenging the Aussie pair sellers were comments challenging the Federal Reserve’s (Fed) further rate hikes from Richmond Fed President Thomas Barkin, as well as softer US Weekly Initial Jobless Claims.

Amid these plays, the S&P 500 Futures remain indecisive even after Wall Street’s downbeat closing whereas Australia’s ASX 200 dropped half a percent at the latest.

Looking ahead, China’s headline inflation numbers, namely the CPI and PPI for January, will be eyed closely amid recently mixed economic signals from Australia’s biggest customer. Following that, preliminary readings of the United States consumer-centric numbers for February like the Michigan Consumer Sentiment Index and 5-year Consumer Inflation Expectations will be crucial for clear directions. Considering the upbeat forecasts for China and the US data, the AUD/USD pair is likely to remain pressured unless witnessing any surprises.

Technical analysis

Multiple failures to cross the 21-DMA hurdle, around the 0.7000 round figure, directs AUD/USD towards the 50-DMA, around 0.6870 by the press time.