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  • AUD/USD builds on Monday’s gains, renews weekly highs above 0.6950.
  • US Dollar Index extends slide below 97.00 on Tuesday.
  • Focus shifts to PMI and New Home Sales data from US.

The AUD/USD pair gained nearly 70 pips on Monday and preserved its bullish momentum during the Asian trading hours on Tuesday on the back of upbeat data releases from Australia. With the greenback remaining on the back foot, the pair stretched higher and touched its best level in a week at 0.6958. As of writing, AUD/USD was up 0.72% on the day at 0.6955.

AUD capitalizes on impressive PMI figures

The Commonwealth Bank Services PMI in Australia jumped to 53.2 in June from 26.9 in May and beat the market expectation of 25.7 by a wide margin. Additionally, the Manufacturing PMI climbed to 50.1 to show expansion in the manufacturing sector’s business activity.

Moreover, the upbeat market mood, as reflected by surging global equity indexes, is providing an additional boost to the risk-sensitive AUD. The S&P 500 futures are up more than 1% on Tuesday, suggesting that Wall Street’s main indexes are likely to start the day in the positive territory. 

Meanwhile, the greenback is struggling to find demand as a safe-haven and allowing AUD/USD to continue to edge higher. At the moment, the US Dollar Index is down 0.4% on the day at 96.62.

Later in the session, the IHS Markit’s preliminary Manufacturing and Services PMI data from the US will be looked upon for fresh impetus. The US economic docket will feature New Home Sales data as well. 

Technical levels to watch for