AUD/USD u-turns on CAPEX inline but below revised prior readings

AUD/USD had extended he minor recovery from 0.7551 lows on the CAPEX data that was released in line with expectations but better than previous 0.8%, although that was revised today to 1.1% while today's data will be subject to possible adjustments next time around. However, offers emerged and took the Aussie lower again. Currently, AUD/USD is trading at 0.7566, down -0.11% on the day, having posted a daily high at 0.7577 and low at 0.7557.

Australia's CAPEX: Q3 rises 1%, estimate for 2017/18 higher

AUD/USD was pressured lower in the European shift as well on the back of copper falling down to a nine-day low of USD 6,761/tonne and a low in NY was made below the 0.7555 Nov 22nd low. The yield differential is a weight on the Aussie too with US ten years rallying over 2% between 2.3188% - 2.3935% overnight and the greenback is holding a bid in Tokyo across the board. 

What next?

Eyes are now on U.S. PCE: "We forecast a 0.2% (0.179%) m-o-m increase in October core PCE inflation (Consensus: 0.2%), which would push up the 12-month change rate to 1.4% (1.389%), from 1.328% in September (Consensus: 1.4%). Considering the strong increase in core CPI and the unexpected strength of healthcare-related prices of PPI in October (which is used for estimating the corresponding components of the core PCE price index), we think core PCE inflation should show a decent increase in the month," explained analysts at Nomura. China comes out with the November PMI official figures next and there will be a lot of attention due here considering the recent bearishness around the economy.

AUD/USD levels

"A choppy session could be in store although I lean towards selling into rallies, looking for an eventual test of 0.7500 and lower as we approach the next Fed meeting on Dec 13," explained Jim Langlands at FX Charts. 

From a technical point of view, Valeria Bednarik, chief analyst at FXStreet explained that, in the short term, the risk is lean towards the downside, given that in the 4 hours chart, the 20 SMA gains bearish momentum above the current level, while technical indicators maintain their bearish strength within a negative territory. "The pair has bottomed this month at 0.7531, the level to break to confirm a new leg lower towards 0.7450, a strong long-term static support."