AUD/USD flirting with lows near mid-0.7600s, US ISM in focus

Haresh Menghani FXStreet

The AUD/USD pair remained under some selling pressure through European trading session and dropped session low near mid-0.7600s, albeit has managed to recover few pips thereafter.

Investors now seemed to have realized that the greenback selling might have been overdone in the near-term. Hence, a goodish US Dollar recovery, as investors try to catch-up with the recent upsurge in the US Treasury bond yields, was seen weighing heavily on higher-yielding currencies - like the Aussie.

Meanwhile, traders largely ignored today's upbeat Chinese manufacturing data, which tends to underpin the China-proxy Australian Dollar. Moreover, a softer tone around commodity space, especially copper and gold, extended little support to commodity-linked currencies and failed to stall the pair's profit-taking slide from over 3-month highs touched on Friday.

• China: Manufacturing activity picks up in June – HSBC

With the US bond yield dynamics acting as an exclusive driver, focus now shifts to today's highlight from the US economic docket - the release of ISM manufacturing PMI, which would now be looked upon for some fresh bullish impetus for the US Dollar recovery move.

Technical levels to watch

Weakness below mid-0.7600s is likely to find support near 0.7635-30 zone, below which the corrective slide should get extended further towards 0.7615 support ahead of the 0.7600 handle.

On the upside, any up-move above 0.7680 level might continue to face some fresh supply near the 0.7700 handle, which if cleared has the potential to continue boosting the pair even beyond 0.7730 intermediate hurdle towards yearly tops resistance near mid-0.7700s.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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