AUD/USD: Bears attacking 0.6500 after pullback from seven-week top


  • AUD/USD respects the seller’s entry near the multi-day high.
  • Market sentiment dwindled amid downbeat macros, ECB’s lack of bold moves and US President Trump's attack on China.
  • Aussie PMIs can offer immediate direction, virus updates remain as the key driver.

AUD/USD extends the latest U-turn from 0.6530 to currently around 0.6510, defying the earlier pullback from 0.6490, at the start of Friday’s Asian session. While downbeat macroeconomics can be considered as a reason for the Aussie pair’s declines from the multi-day top, recently weak trading sentiment is also a catalyst for the risk barometer’s declines.

China’s Manufacturing PMIs earlier questioned the recent rally…

Not only soft prints of China’s April month official Manufacturing PMI, down to 50.8 from 51.0 expected, but Caixin Manufacturing PMI’s drop into the contraction suggesting region, to 49.4 from 50.1 prior, also were the first to check the Aussie bulls during Thursday’s Asian session.

The moves were then followed by downbeat European GDP and US Jobless Claims, Chicago Fed Manufacturing figures that spread worries of broad weakness in macroeconomics due to the coronavirus (COVID-19).

ECB’s soft landing also hurt the sentiment and so does Trump’s attack on China…

Other than the downbeat data-points, the European Central Bank’s (ECB) lack of bold moves as well as US President’s attack on China also weighs on the pair.

The ECB did soften rates for longer-term loans for banks and took measures to promote landing for special purpose loans. However, the vague performance of the ECB falls short of the economic threat and required actions as signaled by the regional central bank earlier.

US President Donald Trump continues to hold China responsible for the virus outbreak. His latest comments have direct links to the US-China trade deal that was the market’s main concern before the deadly virus erupted a few months back.

Moving on, Australia’s AiG Performance of Manufacturing Index and Commonwealth Bank Manufacturing PMI, with respective prior of 53.7 and 45.6, are likely immediate catalysts for the Aussie pair. Though, trade and virus updates are likely to have a major impact on the risk barometer’s performance.

Technical analysis

The pair’s failure to cross 100-day SMA, at 0.6566 now, seems to drag it back to mid-April top surrounding 0.6445/40. Though, bullish MACD keeps favoring the quote’s run-up towards 0.6685/90 area comprising 200-day SMA and March month high.

Additional important levels

Overview
Today last price 0.6509
Today Daily Change -47 pips
Today Daily Change % -0.72%
Today daily open 0.6556
 
Trends
Daily SMA20 0.6314
Daily SMA50 0.6303
Daily SMA100 0.657
Daily SMA200 0.6689
 
Levels
Previous Daily High 0.6558
Previous Daily Low 0.6486
Previous Weekly High 0.6406
Previous Weekly Low 0.6253
Previous Monthly High 0.6686
Previous Monthly Low 0.5509
Daily Fibonacci 38.2% 0.6531
Daily Fibonacci 61.8% 0.6514
Daily Pivot Point S1 0.6509
Daily Pivot Point S2 0.6461
Daily Pivot Point S3 0.6436
Daily Pivot Point R1 0.6581
Daily Pivot Point R2 0.6606
Daily Pivot Point R3 0.6653

 

 

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