The AUD/USD currency traded consistently lower on the back of sluggish Australian PMI data. However, the sell-off didn’t come as a surprise. It’s something we forecasted in our previous analysis update.
Today, the AUD/USD currency pair dropped 0.3% of the lowest since 12 July to 0.6995 as worse than expected Australian Purchasing Managers Index (PMI) weigh on Aussie. Introductory reading of AU CBA/Markit Purchasing Managers’ Index (PMI) for July confirmed that the Manufacturing PMI lagged behind 52.0 previously 51.4.
The Aussie dropped to a 12-day low of $0.6978 on the back of dovish sentiments and the next rate cut by the Reserve Bank of Australia which is expected in October or November.
With renewed communication between US trade negotiator Robert Lighthizer and China’s negotiator Vice Premier Liu He, the 12th round of trade discussions between the US and China may take place in Beijing ahead July end. The upcoming trade talks between the U.S. and China may extend some support to Aussie in the coming days.
AUD/USD – Technical Outlook
AUD/USD is retracing lower as the market is trading below 0.7010 resistance and the 50 SMA. Bears crave to break below the 0.7000 handles to touch 0.6981 and 0.6955 support. AUD/USD is trading beneath its main SMAs, suggesting bearish momentum in the near term. Next resistances can be seen near 0.7010 and 0.7030 levels.
Daily Support and Resistance
Pivot Point 0.7012
AUD/USD – Trade Tips
Keep an eye on 0.6970 as it’s likely to push AUD/USD higher until 0.7010. On the other hand, I will be looking to stay bearish below 0.7015 today. All the best!