|

AUD/USD regains 0.6900 amid corrective pullback ahead of RBA’s Lowe

  • AUD/USD picks up bids to refresh intraday high, snaps two-day downtrend around eight-day low.
  • Markets consolidate recent losses amid a lack of major data/events.
  • Fed Chair Powell’s testimony, US PMIs raised concerns over economic slowdown and drowned the pair.
  • RBA’s Lowe may help buyers on repeating the latest hawkish bias.

AUD/USD pares recent losses around 0.6900 as recession fears stall, for the time being, amid a quiet Asian session on Friday. Also keeping the Aussie buyers hopeful is the scheduled speech from Reserve Bank of Australia (RBA) Governor Philip Lowe, around 11:30 GMT.

Fears of economic slowdown triggered the market’s rush to risk safety the previous day, which in turn weighed on the AUD/USD prices due to its risk-barometer status. In doing so, the Aussie pair couldn’t cheer upbeat PMIs at home, nor the softer US activity numbers, as the US dollar benefited from the risk-aversion wave.

That said, the preliminary readings of Australia’s S&P Global PMIs for June came in mixed as the Manufacturing and Services PMIs rose past market forecasts and priors but the Composite PMI eased below the previous readouts. The Manufacturing PMI rose to 55.8 versus 54.7 expected and 55.7 prior whereas the S&P Global Services PMI rose past 49.1 market consensus to 52.6, versus 53.2 previous readings. It should be noted that the Composite PMI eased below 52.9 to 52.6 in June.

On the other hand, S&P Global Services PMI for the US slumped to 51.6 in June from 53.4 prior, not to forget missing the 53.5 forecasts. Further, the Manufacturing PMI not only missed the market expectation of 56 by a wide margin in June, to 52.4 versus 57.00 previous readings, but also slumped to a nearly two-year low.

Elsewhere, Federal Reserve (Fed) Chairman Jerome Powell cited inflation and recession woes as the challenges to ensure a smooth landing, despite expecting firmer growth this year, during his second round of Testimony. The central banker’s concern for recession joined downbeat US data to favor the risk-off mood.

While portraying the mood, the S&P 500 Futures drop 0.30% while the US 10-year Treasury yields remain unchanged at around 3.09% after dropping to a fortnight low the previous day.

Moving on, RBA’s Lowe is likely to reiterate his hawkish bias, especially after the recently upbeat Aussie PMIs, which in turn could favor the AUD/USD bulls. However, any mentioning of economic fears could join the latest downbeat performance of iron ore, Australia’s key export item, to recall the bears.

Technical analysis

A six-week-old support line around 0.6855-60 puts a floor under the AUD/USD downside. Recovery moves, however, need validation from a downward sloping resistance line from June 07, at 0.6930 by the press time. 

Additional important levels

Overview
Today last price0.6905
Today Daily Change-0.0022
Today Daily Change %-0.32%
Today daily open0.6927
 
Trends
Daily SMA200.7084
Daily SMA500.7109
Daily SMA1000.7216
Daily SMA2000.7236
 
Levels
Previous Daily High0.6975
Previous Daily Low0.6881
Previous Weekly High0.707
Previous Weekly Low0.685
Previous Monthly High0.7267
Previous Monthly Low0.6828
Daily Fibonacci 38.2%0.6917
Daily Fibonacci 61.8%0.6939
Daily Pivot Point S10.688
Daily Pivot Point S20.6833
Daily Pivot Point S30.6785
Daily Pivot Point R10.6974
Daily Pivot Point R20.7022
Daily Pivot Point R30.7069

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD trims gains, nears 1.1700

The EUR/USD pair eases in the American afternoon and approaches the 1.1700 mark. The pair surged earlier in the day after the ECB left interest rates unchanged and upwardly revised inflation and growth figures. The US CPI rose 2.7% YoY in November, nearing Fed’s goal.

GBP/USD steadies below 1.3400 as traders digest BoE policy update and US inflation data

The GBP/USD pair stalls the previous day's pullback from the vicinity of mid-1.3400s and a nearly two-month high, though it struggles to attract meaningful buyers during the Asian session on Friday. Spot prices currently trade around the 1.3380-1.3385 region, up only 0.05% for the day, amid mixed cues.

Gold edges lower despite Fed rate cut hopes on cooling US inflation

Gold price declines to below $4,350 during the early Asian trading hours on Friday. The precious metal edges lower due to some profit-taking and weak long liquidation from shorter-term futures traders. 

Bitcoin, Ethereum, XRP face sharp volatility as US posts lowest inflation rate in years

The latest inflation report released on Thursday in the United States sparked a wave of volatility in the crypto markets. The US Consumer Price Index rose 2.7% YoY in November, below forecasts of 3.1%, and lower than September's 3.0% reading, according to the Bureau of Labour Statistics.

Bank of England cuts rates in heavily divided decision

The Bank of England has cut rates to 3.75%, but the decision was more hawkish than expected, leaving market rates higher and sterling slightly stronger. It's a close call whether the Bank cuts again in February or March.

Ripple holds $1.82 support as low retail demand weighs on the token

Ripple (XRP) is trading between a key support at $1.82 and resistance at $2.00 at the time of writing on Thursday, reflecting the lethargic sentiment in the broader cryptocurrency market.