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  • AUD/USD bounces off intraday low following China’s official activity numbers.
  • China NBS Manufacturing PMI eases to 51.0, Non-Manufacturing PMI jumps to 55.2 in May.
  • Market sentiment dwindles amid a quiet session in Asia, US holiday tests momentum traders.
  • Trade woes concerning China, reflation woes and pre-RBA caution battle stimulus hopes, easing covid worries.

AUD/USD extends bounce off 0.7699 to 0.7715, up 0.07%, following China’s official activity data during early Monday. Even so, the mixed catalysts for market sentiment and off in the US test the buyers.

China’s headline NBS Manufacturing PMI eased below 51.1 forecast and prior to 51.1 whereas the Non-Manufacturing PMI marked a big beat to the 52.7 market consensus and 54.9 previous readouts with 55.2 figures.

Read:  China PMIs: May official composite PMI at 54.2, Services big beat

In addition to the mixed data, indecisive catalysts concerning market sentiment also trouble the AUD/USD traders.

Risk appetite struggles for a clear direction amid a long weekend in the UK and the US, no to forget mixed direction. US President Joe Biden’s multi-billion-dollar worth of budget and spending plans join receding covid infections in Victoria to keep the buyers hopeful. On the contrary, fears of reflation, backed by the recent US data, join trade-negative signals from the US and New Zealand, not to forget the latest souring relations of Australia and China, to weigh on the mood.

Amid these plays, S&P 500 Futures print mild gains while the US bond moves are absent amid the holiday in America and Britain.

Moving on, AUD/USD may remain on the backfoot amid the pre-RBA caution, despite hoes favoring inaction. However, any wild spike can’t be ruled out amid an off in the key markets and light data elsewhere.

Technical analysis

Unless offering a daily closing below 0.7710-05 area, comprising 50-day SMA and a five-week-old ascending support line, odds of AUD/USD rebound confronting 0.7760 hurdle, including 21-day SMA, can’t be ruled out. Hence, a sideways grind is likely to persist, for now.