AUD/USD drops to multi-day low as sellers cheer sluggish Aussie PMI data

AU PMIs add support for dovish RBA.
The Aussie pair needs to offer a sustained break below 0.6995 for further declines.

Anil Panchal FXStreet

Adding to the previous losses, AUD/USD declines to the lowest since July 12 to 0.6995 after Australian PMI data pleased sellers on early Wednesday.

Preliminary readings of AU CBA/Markit Purchasing Managers’ Index (PMI) for July showed that the Manufacturing PMI lagged behind 52.0 prior to 51.4 and the Services counterpart also trailing the 52.6 earlier with 51.9 mark, resulting into 51.8 Composite PMI versus 52.5 previous readouts.

Details suggest the slower rise of business activity and new orders joining the greatest decline in employment since the survey began in 2016. The same offer additional data to the Reserve Bank of Australia (RBA) to maintain its bearish bias, which in turn can keep exerting downside pressure on the Aussie pair.

Traders may now keep an eye over the US economic calendar while following trade/political headlines in the meantime. The US is up for publishing July month key PMI numbers coupled with June month New Home Sales.

Technical Analysis

The pair is yet to offer a sustained break of 0.7000 – 0.6995 support-zone comprising 21-day exponential moving average (EMA), July 17 low and July 08 high, which in turn can trigger its pullback to 0.7020 including 100-day EMA. Should prices slip below 0.6995, sellers can aim for 0.6980 and July 10 low near 0.6910.

Author

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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