AUD/USD keeps losses after mixed China inflation data

• AUD/USD remains on the back foot after China data.
• PPI prints above estimate, CPI missed expectations.
• 10Y AU-US spread largely unchanged after the data release.

China December producer price index (PPI) came in at 4.9% y/y, beating the estimate of 4.8%. Still, AUD/USD remains under pressure around 0.7815, largely due to the fact that factory-gate inflation has moderated sharply from the previous month's print of 5.8%.

Also, consumer price index (CPI) printed at 1.8%, missing the estimated rise to 1.9% from the November figure of 1.7%.

The mixed data has not had a significant impact on the Aussie bond yields, leaving the 10-year AU-US yield spread largely unchanged at 15.4 basis points.

AUD/USD Technical Levels

FXStreet Chief Analyst Valeria Bednarik writes-

the pair retains its bearish stance, as in the 4 hours chart, it's developing below its 20 SMA, which slowly turns lower in the 0.7850 region, while technical indicators gained further downward traction within bearish territory. A big static support comes at 0.7745, the 61.8% retracement of the October/December decline, considered now a line in the sand, as a break below it will imply a bearish continuation for the upcoming sessions. 

Support levels: 0.7800 0.7770 0.7745 

Resistance levels: 0.7850 0.7895 0.7920