AUD/USD portrays cautious mood near 0.6400, China, central bankers in the spotlight


  • AUD/USD remains depressed at YTD low after five-week losing streak.
  • Weekend news from China pauses further downside of Aussie pair ahead of top-tier data/events.
  • PBoC is expected to cut benchmark rates after trimming other rates earlier in August.
  • Aussie/US PMIs, Jackson Hole Symposium eyed for clear directions.

AUD/USD holds lower grounds near 0.6400, struggling for clear directions after refreshing the yearly low during a five-week downtrend. The Aussie pair’s latest inaction could be linked to the hopes of more stimulus from China and the cautious mood ahead of the People’s Bank of China’s (PBoC) Interest Rate Decision. More importantly, the market’s consolidation ahead of the August month Purchasing Managers Indexes (PMIs) and Jackson Hole Symposium prods the risk-barometer pair.

During the weekend, China’s top-tier financial authorities gather to discuss the market’s concerns about the spillover effects from the nation’s reality sector debt crisis, as well as doubts about the local government bonds. Following the meeting, the officials showed readiness for more stimulus and put a floor under the riskier assets.

Previously, the People’s Bank of China (PBOC), surprised markets by lowering the one-year Medium-term Lending Facility (MLF) rate to 2.50% from 2.65% previous, as well as by cutting the Reverse Repo Rate to 1.8% from 1.9% previously. That said, the PBoC also cut Statutory Liquidity Financial Ratio (SLF) in the last week. It’s worth observing that China’s Retail Sales and Industrial Production disappointed and joined the fears of the debt market crisis, as well as the easing economic recovery, to weigh on the AUD/USD price.

That said, Australia’s headline employment data were disappointing for July and joined the downbeat Reserve Bank of Australia (RBA) Minutes to exert additional downside pressure on the Aussie pair. It’s worth noting that the softer readings of the quarterly Wage Price Index also favored the AUD/USD bears.

On the other hand, The upbeat US second-tier manufacturing activity numbers, Retail Sales and wage growth allowed the US Dollar to remain firmer for the fifth consecutive week, especially backed by the hawkish Fed Minutes. Also keeping the Greenback firmer was the risk-off mood and the upbeat Treasury bond yields. With this, US Dollar Index (DXY) grew in the last five consecutive weeks, to 103.40 at the latest.

Amid these plays, Wall Street closed mixed on Friday but marked a heavy weekly loss whereas the US Treasury bond yields retreat after a strongly negative week for the equities and the upbeat bound coupons.

Moving on, the PBoC Interest Rate Decision and the headlines about China may entertain the AUD/USD pair traders ahead of Wednesday’s preliminary PMIs for August and the late-week headlines from the Kansas Fed’s annual event for central bankers, namely the Jackson Hole Symposium.

Technical analysis

Unless providing a daily closing beyond a five-week-old descending resistance line, around 0.6490 by the press time, the AUD/USD pair remains on the seller’s radar.

Additional important levels

Overview
Today last price 0.6408
Today Daily Change -0.0003
Today Daily Change % -0.05%
Today daily open 0.6411
 
Trends
Daily SMA20 0.6574
Daily SMA50 0.6676
Daily SMA100 0.6669
Daily SMA200 0.6734
 
Levels
Previous Daily High 0.6429
Previous Daily Low 0.6379
Previous Weekly High 0.6522
Previous Weekly Low 0.6364
Previous Monthly High 0.6895
Previous Monthly Low 0.6599
Daily Fibonacci 38.2% 0.641
Daily Fibonacci 61.8% 0.6398
Daily Pivot Point S1 0.6384
Daily Pivot Point S2 0.6356
Daily Pivot Point S3 0.6334
Daily Pivot Point R1 0.6433
Daily Pivot Point R2 0.6456
Daily Pivot Point R3 0.6483

 

 

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