AUD/USD off 8-week highs, side-lined near 0.7250 ahead of China PMIs

The Aussie bulls appear to take a breather in the early Asian trading, allowing the AUD/USD pair to consolidate the overnight rally near the midpoint of the 0.72 handle, as markets await the second-linier Australian macro data and Chinese NBS manufacturing PMI report for the next push higher.

On Wednesday, the Aussie rallied nearly 75—pips to the highest levels since early December at 0.7273 after the US dollar slumped across the board in a knee-jerk reaction to the dovish FOMC statement, as the FOMC member adopted the patience mantra in their forward guidance by removing reference to further gradual rate increases and adding that it is prepared to adjust balance sheet normalization.  The dovish take came in response to the global economic and financial developments as well as on muted inflation pressures.

The upside in the spot was also boosted by a broad-based rally across the commodities markets that underpinned the resource-linked Aussie. Gold prices on Comex refreshed 8-month tops near 1323 levels, Comex copper futures jumped nearly 2% to 2.78 region while both crude benchmarks rallied amid Venezuela concerns and the bullish EIA crude stocks data.

Markets now await the key Chinese NBS manufacturing and services PMI reports for fresh trading impetus. The Chinese manufacturing sector activity is seen slowing slightly to 49.3 in January, remaining within the contraction territory. Poor Chinese factory data could re-ignite China slowdown concerns and trigger a fresh leg lower in the Australian dollar.

AUD/USD Technical Levels