. AUD/USD Rebounds on Mixed PMI Data - 30 June 2023

AUD/USD Rebounds on Mixed PMI Data

30 Jun 2023

AUD/USD Bounces from 0.6600 on Mixed Australian and China PMI Data.

Fundamental Overview

Recovery as AUD/USD Reaches 0.6650

The AUD/USD pair has rebounded from the support level near 0.6600 during Friday’s Asian trading session. Currently, it is regaining ground and moving toward the 0.6650 level. The market was influenced by mixed results in China’s NBS Manufacturing and Services PMI, while the Australian dollar only experienced a minor impact from Australia’s disappointing private sector credit statistics. Moreover, market participants are keeping an eye on the expected US PCE inflation.

Resilience Amidst Market Challenges

Despite reaching new weekly lows on Thursday, the AUD/USD pair has managed to stay above the 0.6600 level. This resilience can be attributed to the recovery in commodities prices and an increase in risk appetite observed on Wall Street, which offset the strength of the US dollar.

Positive Retail Sales and the Impending Manufacturing PMI

During the Asian session, Australia reported a 0.7% increase in retail sales for May, surpassing expectations. This positive data helped alleviate the negative impact of the weak Monthly Consumer Confidence Index (CPI), which was released on Wednesday. Additionally, Australia is expected to release its Price Sector Credit report on Friday, alongside China’s official June manufacturing PMI.

RBA’s Interest Rate Decision and Market Sentiment

The Reserve Bank of Australia (RBA) is scheduled to announce its interest rate decisions on Tuesday. Currently, market sentiment leans towards no change in the cash rate, particularly in light of the most recent inflation figures. However, given the tight labor market conditions and high inflation rate, there is still room for surprises.

Strong US Economic Indicators and the Impact on AUD/USD

The US dollar is experiencing global support due to robust economic indicators, including unemployment claims and GDP growth. Federal Reserve Chair Powell’s remarks suggesting further rate hikes have also contributed to the strength of the US currency. As a result, US rates have reached new monthly highs, making it challenging for the AUD/USD pair to gain further momentum. The US is expected to report consumer inflation, specifically Core Personal Consumption Expenditure, on Friday.

AUD/USD Technical Analysis – Daily Chart

Technical Overview

  • AUD/USD is currently trading within a downward channel.
  • The pair is positioned below all Simple Moving Averages (SMA).
  • The Relative Strength Index (RSI) indicates bullishness, while the Stochastic oscillator suggests no clear trend.
  • Resistance level: 0.6632
  • Immediate support level: 0.6599

How to Trade AUD/USD

Consolidation and Potential Breakout

After a significant downward movement, the price of AUD/USD has stabilized and is currently trading near a resistance zone. If this zone is successfully breached and the price remains above it, further gains are possible.

Trade Suggestion

  • Entry: Buy at 0.6636
  • Take Profit: 0.6676
  • Stop Loss: 0.6604

Frequently Asked Questions (FAQs)

What were the factors influencing the AUD/USD pair?

The AUD/USD pair was influenced by mixed results in China’s NBS Manufacturing and Services PMI, Australia’s retail sales data, US economic indicators, and Federal Reserve Chair Powell’s remarks.

What are the upcoming events affecting the AUD/USD pair?

The upcoming events that could impact the AUD/USD pair include the Reserve Bank of Australia’s interest rate decision, the release of Australia’s Price Sector Credit report, and China’s official June manufacturing PMI.

Why is the US dollar experiencing global support?

The US dollar is receiving global support due to strong economic indicators such as unemployment claims and GDP growth. Additionally, Federal Reserve Chair Powell’s comments indicating the possibility of further rate hikes have boosted the US currency.