- AUD/USD eases from intraday high following mixed data from the largest customer.
- China NBS Manufacturing PMI drops below 51.7 forecast and 51.9 prior, Non-Manufacturing PMI rose past-52.6 market consensus.
- Market sentiment dwindles amid covid, vaccine updates and strong US Treasury yields.
- Risk catalysts keep the driver’s seat, US dollar moves should be observed closely.
AUD/USD trims intraday gains while stepping back from the day’s high of 0.7785 to around 0.7775, up 0.12% on a day, by the press time of early Friday. China’s PMI figures seem to have triggered the latest pullback in the Aussie prices. Also challenging the quote could be the downbeat sentiment and the US dollar recovery.
China’s official activity data for April portrays a mixed scenario for the world’s second-largest economy. While the headline NBS Manufacturing PMI eased to 51.1, Non-Manufacturing PMI crossed expectations with 54.9 figures.
Read: China Non-Manufacturing PMI & NBS Manufacturing PMI Comp: 53.8
Not only the mixed data but downbeat market sentiment also contribute to the AUD/USD pair’s latest weakness. Among them, fears of covid strain from India and China’s curb on tech giants join doubts over AstraZeneca vaccine to magnify risk-off mood.
Alternatively, hopes of a vaccine for the latest virus variant, backed by BioNTech/Pfizer, seem to join the broad hopes of economic recovery in the West.
Against this backdrop, S&P 500 Futures print mild losses while markets in Asia-Pacific are also printing smaller losses by the press time. Further, the US 10-year Treasury yields and the US dollar index (DXY) extend the previous day’s run-up and weigh on AUD/USD prices.
Looking forward, headlines concerning the virus, vaccine and stimulus from the US should be given high attention amid a lack of top-tier data while trying to forecast near-term AUD/USD moves.
Technical analysis
Not only the 0.7800 threshold and 0.7820 level but March tops close to 0.7840 also restrict short-term AUD/USD upside. Meanwhile, sellers are less likely to take fresh entries until witnessing a sustained break of the monthly support line and 50-day SMA, respectively around 0.7735 and 0.7720.
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