AUD/USD climbed 0.35% to near 0.6945 on Tuesday as a softer US Dollar and upbeat Chinese trade data lifted the Aussie. Yet the pair still sits below its 20-day EMA at 0.6957, keeping the near-term tone bearish ahead of June US inflation figures.
The Australian Dollar pushed higher against the Greenback on Tuesday, with AUD/USD trading 0.35% up near 0.6945 during the European session. The move came as the US Dollar underperformed its peers before the release of June Consumer Price Index data at 12:30 GMT.
Softer dollar and Chinese data lift the Aussie
The US Dollar Index slipped 0.1% to near 101.16, weighing on the Greenback across major crosses. Traders are focused on the upcoming inflation print, after Federal Reserve officials signaled they are more worried about high inflation than a soft job market.
On Monday, Fed Governor Christopher Waller said another hot inflation figure would be a signal, not noise, about the need to tighten policy further. Estimates point to headline CPI cooling to 3.8% year-on-year in June from 4.2% in May, with core prices rising steadily at 2.9%.
The Aussie also drew support from China. The country's trade surplus widened to USD125.62 billion against USD121 billion estimates and the previous reading of USD105.43 billion, an upbeat print that strengthened the Australian Dollar.
The 20-day EMA remains the key barrier
Despite the bounce, the near-term tone stays bearish because spot holds below the 20-day Exponential Moving Average at 0.6957. The pair's inability to reclaim this short-term EMA hints at persistent overhead supply. The Relative Strength Index (14) around 44 keeps momentum mildly negative without reaching oversold territory.
A daily close above the 20-day EMA would be needed to ease the downside bias, and a break higher could extend the recovery towards the June 23 high at 0.7006. On the downside, a drop below the March low of 0.6904 could open a slide towards the January 7 high of 0.6766.
Source: FXStreet
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