“¢ Goodish pickup in the USD demand prompts some fresh selling on Monday.
“¢ Bulls seemed unimpressed by slightly weaker Chinese PMI prints.
“¢ US ISM PMI eyed for some trading impetus ahead of Tuesday’s RBA decision.
The AUD/USD pair came under some renewed selling pressure at the start of a new trading week and eroded a part of Friday’s strong up-move.
The pair struggled to sustain/build on its momentum further beyond the 0.7400 handle and now seems to have stalled last week’s goodish recovery move from 18-month lows. A combination of negative factors, ranging from a pickup in the US Dollar demand and uninspiring Chinese PMI prints were seen exerting downward pressure through the Asian session on Monday.
Against the backdrop of slightly lower than expected official Chinese PMIs (manufacturing and services) released over the weekend, the Caixin Manufacturing PMI for June arrived at 51.0 as against 51.1 expected and did little to provide any boost to the China-proxy Australian Dollar. Adding to this, weaker commodity prices, especially copper, added to the already weaker sentiment around the commodity-linked Aussie and further collaborated to the pair’s offered tone.
Investors also seemed to hold back from placing any aggressive bets ahead of the latest RBA monetary policy decision on Tuesday. This along with important US macro releases, scheduled at the start of a new month, including the keenly watched NFP, will play a key role in determining the pair’s next leg of directional move.
A busy week kicks off with the release of US ISM manufacturing PMI and will be looked upon to grab some short-term trading opportunities later during the early North-American session ahead of Tuesday’s RBA policy update.
Technical levels to watch
Immediate support is pegged near mid-0.7300s, below which the pair is likely to head towards challenging multi-month lows, around the 0.7325-20 region, before eventually dropping to the 0.7300 handle.
On the upside, the 0.7400-0.7410 region now seems to have emerged as an immediate hurdle, which if cleared might trigger a short-covering bounce towards 0.7445-50 supply zone en-route the key 0.7500 psychological mark.
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