Search ForexCrunch
  • AUD/USD fades the late US-session bounce from 0.6900.
  • China’s fresh punitive measures on Australian beef join broadly downbeat trading sentiment.
  • Australia’s AiG Performance of Construction Index rose, Commonwealth Bank PMIs weakened in June.
  • Aussie Retail Sales and Caixin Services PMI from Beijing will offer immediate clues.

AUD/USD seesaws around 0.6925, following a U-turn from 0.6901, during the early Asian session on Friday. The pair’s failure to extend the recent upward trajectory seems to take clues from the broad risk-aversion wave. Among the challenges to trading sentiment, the Chinese fight against the world and the coronavirus (COVID-19) updates become the key.

Australia’s June month AiG Performance of Construction Index recovered from 24.9 to 35.5. Further, Commonwealth Bank (CBA) Services PMI slipped below 53.2 forecasts and prior to 53.1. Though, the Composite PMI from the CBA increased to 52.7 from 52.6. However, the aussie pair failed to respond to the news amid souring market sentiment. On Thursday, May month Trade Balance from Australia dropped below 9,000M to 8,025M.

Talking about the risk catalysts, China announced readiness to levy 12% tariffs on Australian beef. The move could be in retaliation to the Aussie PM Scott Morrison’s announcement of making Australia a safe-haven for Hong Kong. Recently, US Secretary of State Mike Pompeo criticized the Chinese Communist Party (CCP) for turning Hong Kong from “the world’s most stable, prosperous, and dynamic cities” to “just another communist-run city.” Also on the same page were the latest comments from the Hong Kong activist Nathan Law who urged global leaders to take back control of the city from China’s CCP for the betterment of locals.

On the other hand, pandemic data from the US have been worrisome off-late. The recent data suggests another record number over 51,000 that stop many reopening activities in New York. Earlier during the week, Texas and Florida also announced multiple measures to tame the virus resurgence and step back from the economic restart.

Amid these catalysts, the market players’ optimism following upbeat US employment data waned. While portraying the welcome job figures, Nonfarm Payrolls surged well beyond 3,000K forecast to 4,800K whereas Unemployment Rate also shrank more than 12.3% expected to 11.1%. Also on the positive side was the news suggesting further easing from the People’s Bank of China (PBOC), as per the Global Times.

The risk-barometers, namely the stocks and US treasury yields, seem to portrays a mixed picture with the S&P 500 Futures marking a gain of 0.12% whereas the US 10-year Treasury yields staying on the back foot around 0.67% as we write.

Looking forward, Australia’s seasonally adjusted Retail Sales for May and China’s Caixin Services PMI for June could offer immediate directions. While the Retail Sales might confirm the initial forecast of a surge in the data by 16.3%, the Chinese service activity gauge could slip from 55 prior to 49.9. Other than the mentioned statistics, today’s economic calendar has nothing major to direct near-term pair moves, which in-turn signals towards a choppy session unless key risk catalysts play their role.

Technical analysis

Unless declining below 0.6900 short-term crucial support confluence, including 21-day EMA and 14-day-old support line, the quote is considered aiming for 0.6975 and 0.7000 numbers to the north.