AUD/USD jumps to four-week high after lackluster US PMis

AUD/USD is set to finish the week up by 2.23%.
US Services and Composite PMIs plummeted below 50, suggesting a recession could be near.
Hawkish RBA minutes revealed during the week cushioned the AUD/USD from falling further on weak Aussie PMIs.

Christian Borjon Valencia FXStreet

The AUD/USD rises for the second consecutive day, registering solid gains amidst a fragile market mood, which shifted sour spurred by weaker than expected US PMIs, showing contraction lying ahead, while the greenback begins to pare some of its earlier losses.

The AUD/USD is trading at 0.6942, bouncing from daily lows at 0.6893 on soft Aussie data and hitting a daily high at 0.6977 before retracting to current price levels.

US Services and Composite PMis plunged to contractionary territory

During the New York session, S&P Global revealed July’s preliminary figures for the US, which showed that the manufacturing index ticked higher, but the services one dropped below 50. Therefore, the S&P Global Composite Index plunged to 47.6, further confirming the ongoing slowdown of the US economy. The AUD/USD jumped on the news, reaching its daily high.

Meanwhile, in the Asian session, the Australian PMIs slowed but remained in expansionary territory, triggering some downward pressure on the AUD/USD. Nevertheless, the RBA minutes released earlier in the week indicating the need for further rate hikes offered some cushion to the major, which later climbed towards its daily high.

In the meantime, the AUD/USD got bolstered by Chinese news. China revealed its intentions to consolidate its economic recovery and prioritize stable prices and employment, battered by Q2 Covid-19 lockdowns, which almost dragged the economy into recessionary territory.

What to watch

Next week, the Australian economic calendar will feature consumer inflation data, retail sales, and the Australian PPI. On the US front, the Federal Reserve Open Market Committee (FOMC) monetary policy decision, US inflation data, and Q2 Gross Domestic Product on its advance reading will give some guidance to AUD/USD traders.

AUD/USD Key Technical Levels

AUD/USD

Overview
Today last price	0.6942
Today Daily Change	0.0016
Today Daily Change %	0.23
Today daily open	0.693

Trends
Daily SMA20	0.6844
Daily SMA50	0.6975
Daily SMA100	0.7144
Daily SMA200	0.719

Levels
Previous Daily High	0.6938
Previous Daily Low	0.6858
Previous Weekly High	0.69
Previous Weekly Low	0.668
Previous Monthly High	0.7283
Previous Monthly Low	0.685
Daily Fibonacci 38.2%	0.6907
Daily Fibonacci 61.8%	0.6889
Daily Pivot Point S1	0.6879
Daily Pivot Point S2	0.6829
Daily Pivot Point S3	0.6799
Daily Pivot Point R1	0.6959
Daily Pivot Point R2	0.6989
Daily Pivot Point R3	0.7039

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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