“¢ A goodish uptick in the US bond yields helped the USD to regain some traction.
“¢ Disappointing Chinese manufacturing PMIs exert some additional pressure.
“¢ Investors now look to this week’s important releases for a fresh directional impetus.
The AUD/USD pair met with some fresh supply at the start of a new trading week and has now weakened back closer to the 0.7200 handle.
With investors looking past Friday’s softer than expected US economic data, a goodish pickup in the US Treasury bond yields helped the US Dollar to regain positive traction and was seen exerting some fresh downward pressure on the major.
Meanwhile, the disappointing release of Chinese manufacturing PMI over the weekend dented sentiment surrounding the China-proxy Australian Dollar. This coupled with the prevalent negative tone around copper prices undermined demand for commodity-linked currencies – like the Aussie and further collaborated to the pair’s weaker tone through the Asian session on Monday.
It would now be interesting to see if the pair is able to find any support at lower levels or the current pull-back marks the resumption of the prior well-established depreciating slide. Market participants now look forward to this week’s important macroeconomic releases, scheduled at the start of a new month, for some fresh directional impetus.
This week’s busy US economic docket kicks off with the release of ISM manufacturing PMI, which will be looked upon for some short-term trading opportunities later during the early North-American session.
Technical levels to watch
Weakness below the 0.7200 handle is likely to accelerate the slide towards the 0.7175 horizontal zone before the pair eventually drops to test the 0.7140 support. On the flip side, the 0.7230-35 region now seems to have emerged as an immediate hurdle, above which the pair is likely to make a fresh attempt towards conquering the 0.7300 handle.
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