AUD/USD holds onto the previous day’s bearish technical confirmation as China data favored bears.

China CPI, PPI both disappoint with softer numbers for January.

Downside break of weekly ascending trend channel, U-turn from 200-HMA favor sellers.

50-HMA joins channel’s support line to challenge immediate recovery near 0.6960.

AUD/USD retreats from intraday high surrounding 0.6950 on downbeat China inflation numbers during early Friday. That said, the softer China Consumer Price Index (CPI) and Producer Price Index (PPI) data for January helped bears to cheer the previous day’s confirmation of bearish bias, via downside beak of the weekly bullish channel and a U-turn form the 200-Hour Moving Average (HMA).

China CPI eased to 2.1% YoY versus 2.2% market forecasts, compared to 1.8% prior, while the 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 50-HMA joins the aforementioned bullish channel’s lower line to restrict immediate upside of the Aussie pair around 0.6960. Adding strength to the downside bias are the bearish MACD signals and the downbeat RSI (14), not oversold.

Even if the quote rises past 0.6960 hurdle, the 200-HMA near the 0.7000 round figure and an upward-sloping resistance line from Tuesday, close to 0.7015 at the latest, could challenge the AUD/USD buyers.

In a case where the AUD/USD pair remains firmer past 0.7015, the odds of witnessing a run-up towards the aforementioned channel’s top near .7050 can’t be ruled out.

Alternatively, the 0.6900 round figure and the weekly low near 0.6855 lure the AUD/USD bears as of late.