Aussie trades upside against the greenback in the Thursday Asian session. This move can be related to the strong prints of the Consumer Price Index (CPI) and Producer Price Index (PPI) from Australia’s largest customer, China.

China’s headline CPI jumped the most since August 2020, by 2.3% YoY and 0.4% MoM in November. The factory-gate inflation data arrived at 12.9% YoY in November.

Elsewhere, Latest comments from the RBA Lowe was paid little attention from the AUD/USD traders. RBA’s Lowe justified the title of his speech, “Payments: The Future?,” as he spoke nothing of the economy nor the Aussie central bank’s next move at the latest. He said, “Both the regulators and the government understand this and are seeking to put in arrangements that encourage innovation and competition and make sure we have a secure and efficient system.” He further added , “There is no strong public policy case for an RBA-backed retail digital currency but a policy case could emerge quickly as technology, consumer preferences change.”

Further Aussie was also favored by the US dollar weakness due to the optimism as early studies showed that the South African covid variant, dubbed as Omicron, is comparatively less harmful than the previous variants of the virus.

Adding to the optimism, BioNTech BNTX.O and Pfizer PFE.N said on Wednesday a three-shot course of their COVID-19 vaccine neutralised the new Omicron variant in a laboratory test, an early signal that booster shots could be key to protection against infection from the newly identified variant.

However, virus-led activity restrictions in Germany, France and the UK creates risk tone in the market sentiment which could weigh on the AUD buyers.

AUD/USD 4 Hour Chart:

Support: 0.7128 (S1), 0.7087 (S2), 0.7059 (S3).

Resistance: 0.7197 (R1), 0.7224 (R2), 0.7266 (R3).

As of now, upbeat Chinese data favors AUD/USD bulls, moving on, Risk catalysts and second-tier US jobs figures may direct the AUD/USD further. We expect a bullish trend for AUD/USD.