• AUD/USD grinds higher after rising to the highest level in 11 weeks.
• Market sentiment remains mildly positive amid softer US inflation, China-linked mixed clues.
• Aussie, China data can entertain intraday traders, risk catalysts are more important for clear directions.

AUD/USD resumes run-up to prod the 0.6800 round figure for the fourth time since early March as markets turn cautiously optimistic after downbeat US inflation and positive vibes from China. However, anxiety ahead of the inflation clues from Australia and China, up for publishing around 01:00 and 01:30 AM GMT, can challenge the Aussie pair buyers during early Thursday.

That said, the US inflation per the Consumer Price Index (CPI) eased to 4.9% YoY for April versus market expectations of reprinting 5.0% inflation mark, marking the first below 5.0% print in two years. The MoM figures, however, matched the upbeat 0.4% forecasts compared to 0.1% previous readings. Further, the CPI ex Food & Energy, known as the core CPI, matched 5.5% and 0.4% market consensus on a yearly and monthly basis respectively versus 5.6% and 0.4% priors in that order.

Following the data, Fed funds futures traders are pricing in a pause before expected rate cuts in September, per Reuters.

Elsewhere, US policymakers failed to seal the debt-ceiling deal in their first attempt but let the ball rolling by allowing office members to discuss the details and try again on Friday, which in turn prod the market sentiment. “Detailed talks on raising the US government's $31.4 trillion debt ceiling kicked off on Wednesday with Republicans continuing to insist on spending cuts, the day after Democratic President Joe Biden and top congressional Republican Kevin McCarthy's first meeting in three months,” said Reuters.

On a different page, Australian Treasurer Jim Chalmers was quoted showing readiness to establish more cordial relations with China while praising Australia’s latest annual budget released the previous day.

Alternatively, China military was quoted as rejecting a meeting proposal by the US military officials, which in turn joins the banking woes and fears of debt ceiling expiration weighing on the market sentiment and the AUD/USD prices ahead of the key Aussie-China data.

Against this backdrop, S&P 500 Futures print mild gains after Wall Street’s mixed close whereas US Treasury bond yields struggle for clear directions.

Moving on, AUD/USD traders await Australia’s Consumer Inflation Expectations for May and China’s CPI, as well as the Producer Price Index (PPI), for April ahead of the US PPI for the said month. More importantly, risk catalysts and central bankers, like the Bank of England (BoE) may offer an active day moving forward.

Technical analysis

A two-month-old ascending resistance line, around 0.6820 by the press time, restricts the short-term AUD/USD upside. That said, repeated failures to cross the 100-DMA hurdle of around 0.6800 teases the Aussie pair sellers.