AUD/USD pares intraday losses near 0.6930 as markets await US inflation precursors

• AUD/USD picks up bids to rebound from intraday low amid sluggish markets.
• Traders pare recent losses amid market’s cautious mood ahead of the key US data.
• RBA SoMP, China inflation numbers failed to impress AUD/USD traders.
• Mixed plays of recession and central bank talks offer inactive session ahead of US consumer-centric data.

AUD/USD consolidates daily losses around 0.6930, bouncing off the intraday low amid early Friday morning in Europe. In doing so, the quote traders lick their wounds amid cautious sentiment ahead of the key US data, as well as amid indecision due to the mixed catalysts.

That said, the quarterly prints of the Reserve Bank of Australia’s (RBA) Statement of Monetary Policy (SoMP) failed to impress the AUD/USD buyers despite posting hawkish economic forecasts and readiness for further interest rate hike. The reason could be linked to the statement saying, “The board is mindful of the rise in interest rates already made and that the policy acts with a lag.”

Also read: RBA hawkish-sounding quarterly Statement on Monetary Policy does little for AUD

Following that, China's Consumer Price Index (CPI) eased to 2.1% YoY versus 2.2% market forecasts, compared to 1.8% prior, while the Producer Price Index (PPI) dropped heavily to -0.8% YoY from -0.7% previous readings and -0.5% consensus. 

Also read: China Consumer Price Index a touch lower than estimates, AUD eyed for reaction

It should be noted that the looming fears of the US recession, as favored the US Treasury bond yields’ inversion, underpin the bearish bias surrounding the AUD/USD pair. However, the previous day’s downbeat US Jobless Claims join the Federal Reserve (Fed) officials’ hesitance in praising higher rate to weigh on the US Dollar and put a floor under the price.

Against this backdrop, S&P 500 Futures print mild losses while the stocks in the Asia-Pacific region remain pressured. However, the retreat in the US Treasury bond yields appears to keep the bears at bay.

Moving on, early signals for the next week’s US inflation data, namely preliminary readings of the US Michigan Consumer Sentiment Index and 5-year Consumer Inflation Expectations for February, will be crucial for the AUD/USD pair traders to watch for clear directions. Considering the upbeat expectations from the scheduled data, as well as the recession woes, the major currency pair is likely to witness further downside.

Technical analysis

Unless breaking the 50-DMA support surrounding 0.6870, the AUD/USD price remains on the bull’s radar targeting the 21-DMA hurdle, around the 0.7000 round figure.