AUD/USD rebounds above 0.6400 on mixed US PMI, dovish Fed Bowman

The Australian Dollar (AUD) reverses earlier losses and edges higher against the US Dollar (USD) on Monday, as traders reassess safe-haven flows following the United States' (US) launch of attacks on Iran over the weekend. The initial rush into the Greenback pushed the Aussie to a one-month low before a mixed batch of US Purchasing Managers Index (PMI) data helped temper US Dollar demand.

AUD/USD is currently trading around 0.6426 at the time of writing, during the American session, having erased most of its intraday losses and now down approximately 0.38% on the day. The pair rebounded strongly from a session low of 0.6372, finding a tailwind as the latest US PMIs failed to deliver a decisive boost to the US Dollar.

US data painted a slightly softer tone, the S&P Global Composite PMI slipped to 52.8 in June from 53 in May, hinting at a mild loss of momentum while still marking over two years of expansion. The Manufacturing PMI held steady at 52, in line with May’s 15-month high and beating forecasts, while the Services PMI dipped to 53.1 from 53.7 but remained above market expectations. Overall, the mixed readings cooled fresh buying interest in the US Dollar, giving AUD/USD room to bounce.

Meanwhile, Fed Governor Michelle Bowman added to the softer Dollar tone, noting that inflation is showing steady progress toward the Fed’s 2% goal and hinting she could back a rate cut as soon as July if the trend continues. Her dovish remarks helped drag the US Dollar Index (DXY) back below the key 99.00 level — it was last seen trading around 98.70, adding extra pressure on the Greenback and giving the Aussie a lift off its lows.

Earlier in the day, S&P Global figures showed Australia’s private sector growing at its second-fastest pace in ten months, with services activity hitting a three-month high and manufacturing holding steady. The encouraging PMI print offered a measure of relief for the Aussie, providing some reassurance after recent soft economic releases had revived talk of possible rate cuts.

Technically, the pair’s strong recovery from the lower edge of its tight range suggests buyers are defending key support near 0.6400, reinforced by the 100-day Moving Average around 0.6362. The Relative Strength Index (RSI) has moved below the midline, and the Moving Average Convergence Divergence (MACD) is flirting with a bearish crossover. A daily close above 0.6450 could open the door for a push back toward the 0.6500–0.6550 area, keeping the range-trading strategies alive. A failure to hold above 0.6400, however, would re-expose the downside toward 0.6300.