- 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.
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
|Today last price||0.6905|
|Today Daily Change||-0.0022|
|Today Daily Change %||-0.32%|
|Today daily open||0.6927|
|Previous Daily High||0.6975|
|Previous Daily Low||0.6881|
|Previous Weekly High||0.707|
|Previous Weekly Low||0.685|
|Previous Monthly High||0.7267|
|Previous Monthly Low||0.6828|
|Daily Fibonacci 38.2%||0.6917|
|Daily Fibonacci 61.8%||0.6939|
|Daily Pivot Point S1||0.688|
|Daily Pivot Point S2||0.6833|
|Daily Pivot Point S3||0.6785|
|Daily Pivot Point R1||0.6974|
|Daily Pivot Point R2||0.7022|
|Daily Pivot Point R3||0.7069|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.