AUD

Weak Chinese data plagues AUD and NZD as the FED continues to hike aggressively. Proximity to China and higher US rates/USD weigh on the currencies.

Technically, AUD/ [USD](https://www.dailyfx.com/usd) appears to have broken below the long-term [zone of support](https://www.dailyfx.com/education/support-and-resistance/supply-and-demand-trading.html). [S&P 500](https://www.dailyfx.com/sp-500) which sold off after the strong [NFP](https://www.dailyfx.com/nfp) job gains on Friday, and partly due to the weak Chinese PMI data. Thursday we see CPI data out of the US forecasted at 8.1%. NZD/USD has followed the same trajectory and has sold off since facing a short-term zone of resistance 0.5800, now heading towards the yearly low of 0.5565. This week, we see a return to dominance for US data, with PPI data and FOMC minutes due on Wednesday. A breakdown below the low would bring into focus the full retracement of the 2020-2021 major move at 0.5470, followed by the October 2008 level of 0.5357. On Friday, Chinese inflation, US retail sales and the University of Michigan consumer sentiment data rounds up the week In addition, China’s service PMI joined the composite reading in contractionary territory of 49.3. [Richard Snow](https://www.dailyfx.com/authors/Richard_Snow) China is a massive global trading partner and proved to the top buyer of commodities during the expansion that ensued after global lockdowns, something that has changed since commodity markets peaked. News of increased Covid cases in Shanghai - Chinas most populous city – once again threatens domestic growth which has a negative effect on AUD and NZD via association. China has been the subject of attention ever since lower revisions to global growth emerged.