AUD/USD stays on the way to yearly low below 0.7500 on mixed Aussie, China data
|- AUD/USD sellers attack intraday low during the four-day downtrend.
- Australia Trade Balance eases in May, Imports and Exports recover.
- US dollar shrugs off downbeat Treasury yields, stock futures remain firm around record top.
- US ISM Manufacturing PMI eyed ahead of NFP, risk catalysts remain as the key.
AUD/USD takes offers around 0.7485, down 0.16% intraday, following the day’s key data release from Australia during early Thursday. In doing so, the Aussie pair drops for the fourth consecutive day, also probing the yearly bottom as the coronavirus (COVID-19) back the pair sellers.
Australia’s headlines Trade Balance eased below 10,000M forecast to 9,681M but stayed above 8,028M prior. However, the Exports and Imports both grew beyond +3.0% and -3.0% previous readouts to +3.0 and +6.0% in that order.
Read: Aussie Trade Balance: Exports soar 6% MoM, AUD at a standstill
It’s worth noting that China’s Caixin Manufacturing PMI also exerts downside pressure on the pair while stepping back to 51.3 versus 51.8 expected and 52.0 prior.
Read: China's Caixin Manufacturing PMI misses estimates with 51.3 in June, AUD/USD unfazed
More than the mixed data, covid woes in Australia weigh on the AUD/USD prices as the nation struggles to tame the variant outbreak amid slower vaccinations. As per the latest updates from ABC News, New South Wales (NSW), Victoria and South Australia (SA) marked no new cases but Sydney and Queensland marked an increase in infections. “To date, Australia has recorded 30,457 confirmed cases of COVID-19, including 907 deaths,” said the news.
Also disturbing the Aussie traders could be the policymakers’ sustained rejection to use AstraZeneca, amid blood clotting fears, even as lagging on the inoculations.
Elsewhere, the UK reported the highest covid cases of 2021 and Indonesia also announced a virus-led emergency for the nation from July 02 to 20.
It’s worth noting that comments from China’s President Xi Jinping, from Tiananmen Square, also weigh on the AUD/USD prices as being the indirect threat to risk appetite, also being from the leader of the largest customer of Australia. China’s Xi showed his firm commitment, “To implement 'one country, two systems' in Hong Kong and Macau.”
Amid these plays, S&P 500 Futures print mild gains but the US 10-year Treasury yields dropped 2.5 basis points to 1.46%. However, the US dollar index (DXY) remains firm around the two-month top by the press time.
Moving on, US ISM Manufacturing PMI will be the key data to watch during the rest of the day whereas covid headlines and Fedspeak could also direct AUD/USD moves, more likely to the south than otherwise.
Read: US ISM Manufacturing June Preview: Expansion to continue but how severe is the labor shortage?
Technical analysis
A pullback from the 0.7600 threshold precedes a clear downside past 200-DMA to keep AUD/USD bears directed to the year low near 0.7475 ahead of the August 2020 top around 0.7415. Meanwhile, any bounce below the 0.7565 level, comprising 200-DMA, becomes immaterial.
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