- AUD/USD renews intraday low while consolidating recent gains around two-week low.
- China Caixin Manufacturing PMI for June came in better than expected, prior.
- Rebound in yields, USD exerts additional downside pressure on the pair.
AUD/USD takes offers to refresh intraday low around 0.6870 as risk-aversion recalled bears after a one-day absence. In doing so, the Aussie pair remains pressured around the fortnight bottom while consolidating the previous gains.
That said, the Aussie pair’s latest moves ignore China’s upbeat activity numbers for June. China’s Caixin Manufacturing PMI rose to 51.7 for June versus 50.1 expected and 48.1 prior. The private activity gauge tracked the official PMIs that offered positive surprises the previous day.
The risk-off mood takes clues from the escalating fears of the economic slowdown and drowns the AUD/USD prices, due to its risk-barometer status.
It’s worth noting that the recovery in the US 10-year Treasury yields appears to have helped the US dollar, in addition to the risk-off mood, to reverse the pullback from a two-week top.
That said, the US Dollar Index (DXY) reversed from a 12-day high to snap a two-day uptrend by closing Thursday’s trading around 104.75, near 104.80 by the press time.
On Thursday, the downbeat US personal spending and softer prints of the Fed’s preferred inflation gauge raised concerns over the health of the world’s largest economy and drowned the US dollar. The greenback’s previous retreat could also be linked to the downbeat US Treasury yields as the benchmark 10-year bond coupons dropped below 3.0%, before recovering to 3.01% at the closing, to portray around 50 basis points (bps) of a fall from June’s peak. The benchmark US Treasury yields rise 1.1 bps by the press time.
Looking forward, AUD/USD traders will pay close attention to the US ISM Manufacturing PMI for June, expected 55.0 versus 56.1 prior, as well as risk catalysts, for fresh impulse.
Also read: ISM Manufacturing PMI Preview: High inflation component steal the show, boost dollar
Technical analysis
Unless breaking the fortnight-long resistance line, near 0.6930 by the press time, AUD/USD remains on the way to a seven-week-old important support line, around 0.6860.
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