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  • AUD/USD stays modestly changed from Friday’s close.
  • US President Trump refrained from any sanctions on China, for now, announced punitive measures for Hong Kong officials.
  • China’s official NBS Manufacturing PMI stays in expansion territory below 50.8 prior.
  • Activity numbers from China, the US will be important whereas political/trade headlines could keep the driver’s seat.

AUD/USD seesaws around 0.6660 at the start of Monday’s Asian session. In doing so, the Aussie pair seems to pay a little heed to the weekend developments while beginning the June month mostly only the same front where it ended the May.

China’s NBS Manufacturing PMI softened, Caixin Manufacturing PMI awaited…

In its May monthly activity data release, published Sunday, China’s NBS cited weakness in the Manufacturing front while portraying upbeat scenario for the Non-Manufacturing gauge. The headline NBS Manufacturing PMI weakened to 50.6 from 50.8 prior and 51.00 expected whereas the services indicator rose to 53.6 from 53.2.

Traders now await private manufacturing activity data, Caixin Manufacturing PMI, up for publishing at 01:45 GMT, to confirm the official readings. The forecast suggests that the Caixin Manufacturing PMI might improve from 49.4 previous readouts but remain in the contraction region to 49.6 in May.

Trump steps back reprimanding China…

During his much-awaited China press conference, US President Donald Trump refrained from announcing any sanctions on the Asian major, which the markets widely anticipated. Rather, the Republican leader criticized the dragon nation’s approach and shunned trade help given to Hong Kong, the details of which were unclear.

While the move disappointed markets in the initial minutes, it did keep the hope of peace between the US and China in the future. Even so, Wall Street closed with mixed performance whereas the US 10-year Treasury yields dropped 5.2 basis points (bps) to 0.653% by the end of Friday.

During the weekend, US President Trump said to postpone the G7 meeting until September and added Australia, Russia, South Korea and India to the list of nations to garner support versus the dragon nation. On the other hand, South China Morning Post (SCMP) came out with the news suggesting, “Moderates who favor dialogue and cooperation as a way to resolve China’s disputes with the United States are losing ground to hardline groups bent on taking the fight to Washington, according to political insiders and observers.”

Looking forward, Australia’s AiG Performance of Mfg Index, Commonwealth Bank Manufacturing Index and TD Securities Inflation figures for May could offer intermediate moves ahead of China’s Caixin Manufacturing PMI data.

Technical analysis

Nearly overbought RSI conditions and multiple failures to cross March month high of 0.6686 keep AUD/USD cautious. However, sellers are also refraining for entries unless witnessing a break of 11-day-old support line, currently around 0.6590/95.

Also read: Chart of the day: AUD/USD is at make-or-break resistance, 0.6400 or 0.6820