AUD/USD looks to extend post-NFP bounce towards 0.7550 ahead of US data
|- AUD/USD consolidates the bounce above 0.7500 amid poor Chinese PMI.
- US dollar rebounds across the board, licking post-NFP wounds.
- Technical setup points to more recovery gains ahead of US ISM Services.
Having witnessed a solid turnaround from six-month lows of 0.7445 on Friday, AUD/USD is catching a breather so far this Monday, slightly on the defensive amid a broad US dollar comeback.
The greenback is paring back US NFP-led losses, as the risk-off market mood comes to the rescue of the USD bulls. Anxiety over the Fed’s next policy moves after the upbeat NFP report combined with a sharp slowdown in China’s services sector activity enticed investors towards the safety bet US dollar.
Meanwhile, poor Chinese data also weighs on the Aussie dollar while investors refrain from placing any big bets on the Antipodeans ahead of the Reserve Bank of Australia (RBA) monetary policy decision due on Tuesday.
The RBA is likely to kick off dialing back its emergency asset purchases program, despite the lockdown in the nation’s largest city due to an outbreak of the Delta covid variant. The central bank is seen holding rates at a record low of 0.10% this week.
In the meantime, the pair awaits the US ISM Services PMI release for fresh trading incentives, as upbeat Australian Retail Sales for May was largely ignored.
AUD/USD: Technical outlook
The aussie has spotted a bull pennant formation on the four-hourly chary, with a sustained break awaited above the falling trendline resistance above 0.7522 to confirm the bullish continuation pattern.
The buyers will then target the 0.7550 psychological level, beyond which the June 29 high at 0.7571 could be tested.
The Relative Strength Index (RSI) is ticking higher above the central line, suggesting additional upside.
AUD/USD: Four-hour chart
On the other hand, if the falling trendline support at 0.7502 gives way, a test of 21-Simple Moving Average (SMA) at 0.7495 could be tested.
Next on the sellers’ radars will be the multi-month lows of 0.7445.
AUD/USD: Additional levels
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