AUD/USD Mixed Despite Lift from China’s Upbeat PMI

  • AUDUSD
    (${instrument.percentChange}%)

AUD/USD Analysis

Today's release showed that factory activity expanded in Australia's biggest trade partner, as Manufacturing PMI rose to 50.2 in June, from 49.6% prior, with sub-50 reading representing contraction.

China offered more encouraging new this week, since authorities updated the COVID-19 protocol and cut isolation times for inbound travelers to seven days plus three days of in-home health monitoring. [1]

Yesterday's data reaffirmed the resilience of the Australian economy, as Retail Sales steadied at 0.9% month-over-month in May.

Despite these recent encouraging news and economic releases, fears over global stagflation persist and have not allowed the Aussie to capitalize on last week's rebound against the US Dollar. US final GDP print revealed a bigger contraction of 1.6% in Q1 (annualized), up from the -1.5% of the second reading.

During Wednesday's "super-panel" at the ECB Forum in Sintra, Fed Chair Powell acknowledged the risk of going too far with monetary tightening, but reiterated the bank's resolve to bring inflation down with a front-loaded rate hike cycle. [2]

AUD/USD avoided fresh June lows earlier and got a lift from China's PMIs. Although we could see further rebound in the near-term, we struggle to see what would lead to a test of the descending trendline from this month's high (0.6990) at this point.

The pair remains contained by the EMA100 (black line) and the broader bias is clearly on the downside. As such, there is increased risk of fresh 2022 lows (0.6829), although bears will likely need fresh impetus for taking 0.6756 out.

Markets now brace for another inflation update from the US, in the form of the Personal Consumption Expenditures, which could spur volatility and determine the pair's next move.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 30 Jun 2022 https://english.www.gov.cn/statecouncil/ministries/202206/28/content_WS62bac848c6d02e533532cdfd.html

2

Retrieved 06 Dec 2022 https://www.youtube.com/watch

Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}