- The Aussie could see a quick end to Friday’s bullish bounce as China PMI figures come in softer than expected.
- RBA rate statement on Tuesday to keep traders on the sidelines as they await a change in rhetoric.
The AUD/USD is trading close to the 0.7400 level at the outset of the new trading week as traders await the next round of China PMI figures.
The Aussie recovered on Friday as the US Dollar took a step back in broader markets, allowing risk-based currencies a chance to get their feet back under them, and risk sentiment will remain a key factor for the AUD/USD ahead of Monday’s China Caixin PMI.
China’s Caixin Manufacturing PMI, expected today at 01:45 GMT, is forecast to come in at 51.0, a slight decline from the previous reading of 51.1. The June NBS Manufacturing PMI for China released over the weekend, printing at 51.5, below the forecast 51.6 and an even further slide from the previous reading of 51.9. Traders will be looking for a bump in the Caixin PMI printing, but a confirmed decline across both PMIs will put further bearish pressure on the Aussie, as slumping figures for China will bode poorly for Australia’s growth, which is heavily reliant on China’s ability to purchase raw materials.
Tuesday will also be bringing the Reserve Bank of Australia’s (RBA) latest rate decision and statement, and although the RBA is broadly expected to remain hung on 1.5% for the foreseeable future, traders will be looking for any adjustments to the central bank’s statement.
AUD/USD Levels to watch
The Aussie’s technical bounce on Friday is a far cry from a bullish reversal, and as FXStreet’s own Valeria Bednarik noted, “the daily chart shows that technical indicators have bounced from oversold readings, maintaining their upward slopes but well below their midlines, while the price is far below all of its moving averages, maintaining the risk skewed to the downside. In the 4 hours chart, the pair is now above a flat 20 SMA, while indicators aim higher within positive territory, supporting additional gains at least toward 0.7440, the immediate resistance.”
Support levels: 0.7380 0.7345 0.7310
Resistance levels: 0.7440 0.7475 0.7510
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