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AUD/USD bulls flirt with 0.6700 hurdle on upbeat Aussie data, softer US inflation signals

  • AUD/USD retreats from intraday high but reverses the week-start losses.
  • Australia’s Westpac Consumer Confidence match upbeat forecasts for July, NAB figures came in firmer for June.
  • US inflation expectations join downbeat NFP to raise doubts about hawkish Fed talks.
  • Wednesday’s US CPI will be the key as China-linked fears prod Aussie pair buyers.

AUD/USD justifies upbeat sentiment data from Australia, as well as cheers broad US Dollar weakness, as bulls prod the key 0.6700 upside hurdle amid early Tuesday. In doing so, the Aussie pair also benefits from the downbeat US inflation expectations, as well as the softer US jobs report, while paying little heed to the recently hawkish Fed talks and softer inflation fears in China.

Australia’s Westpac Consumer Confidence for July jumps 2.7%, matching analysts’ estimation, versus 0.2% prior whereas the monthly business sentiment figures from the National Australia Bank (NAB) also flash upbeat outcomes for June. That said, the NAB’s Business Conditions improve to 9 from 8 while the Business Confidence rose to 0.0% versus -4.0 prior.

While the Aussie sentiment figures keep the buyers hopeful, the latest US inflation expectations flagged fears of deflation, especially after the previous day’s downbeat China Consumer Price Index (CPI) and Producer Price Index (PPI).

That said, the Federal Reserve Bank of New York's monthly Survey of Consumer Expectations suggests that the US consumers' one-year inflation expectation dropped to the lowest level since April 2021 at 3.8% in June from 4.1% in May.

The downbeat US inflation clues follow Friday’s disappointment from the headline job numbers to drown the US Dollar. It should be observed that the latest US employment report for June marked a negative surprise and offered a big blow to the US Dollar, making it post the biggest daily loss in three weeks on Friday. However, Monday’s downbeat prints of China inflation data flagged fears of deflation in the world’s biggest industrial player, which in turn allowed the US Dollar to lick its wounds.

Even so, the Federal Reserve (Fed) officials remain hawkish and prod the AUD/USD bulls. On Monday, San Francisco Fed President Mary Daly said, "We're likely to need a couple more rate hikes over the course of this year to really bring inflation sustainably back to the Fed's 2% goal." On the same line, Cleveland Fed President Loretta Mester also said that the Fed will need to tighten the monetary policy "somewhat further" to lower inflation. Furthermore, Federal Reserve Vice Chair for Supervision Michael Barr said, "We are quite attentive to bringing inflation down to target." 

Amid these plays, S&P500 Futures trace upbeat Wall Street performance while the US Treasury bond yields remain pressured. That said, the benchmark US 10-year Treasury bond yields printed the first daily loss in July the previous day whereas the two-year counterpart declined for the second consecutive day, to respectively near 4.00% and 4.86%

Looking ahead, AUD/USD pair traders should pay attention to the risk catalysts for intraday directions as the economic calendar appears mostly empty ahead of the key Wednesday.

Technical analysis

Although the AUD/USD bulls remain in the driver’s seat past 0.6600, a fortnight-old descending resistance line and the 200-DMA challenge the pair’s upside momentum respectively near 0.6690 and 0.6700.

Additional important levels

Overview
Today last price0.6688
Today Daily Change0.0012
Today Daily Change %0.18%
Today daily open0.6676
 
Trends
Daily SMA200.6722
Daily SMA500.6678
Daily SMA1000.6685
Daily SMA2000.6698
 
Levels
Previous Daily High0.6696
Previous Daily Low0.6624
Previous Weekly High0.6705
Previous Weekly Low0.6599
Previous Monthly High0.69
Previous Monthly Low0.6484
Daily Fibonacci 38.2%0.6651
Daily Fibonacci 61.8%0.6668
Daily Pivot Point S10.6634
Daily Pivot Point S20.6593
Daily Pivot Point S30.6562
Daily Pivot Point R10.6706
Daily Pivot Point R20.6737
Daily Pivot Point R30.6779

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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