AUD/USD: steady on Chinese data, traders await further key events

AUD/USD currently stands at 0.7390 having traded at a high of 0.7405 and a low of 0.7389. For the first scheduled event from the calendar for China this week, we have had the release of the China Caixin Manufacturing PMI for June. This arrived at 51.0 vs the expected 51.1. The prior was 51.1, so a small dip there but still in expansion territory. (From the weekend, we had Manufacturing PMI 51.5, (expected 51.6, prior 51.9), and Services PMI 55.0, (expected 54.8, prior 54.9)).

• China's Caixin Manufacturing PMI a tad weaker at 51.0 in June, misses estimates

Meanwhile, AUD/USD was down to the lowest level since January 2017, around 0.7325 on the back of dollar strength n the main and also some pressure from the slide in the Chinese yuan- (Since 12 June, the eve of the  FOMC decision, almost all major currencies are down against the US dollar).

The week ahead

For the week ahead, we have the RBA ad indeed the 6th July when we will see if there will be any responses from China to the ongoing trade battle with the US, (6th July will be the imposition of tariffs on $34bn of Chinese imports).

For the RBA, analysts at Westpac Banking Corporation, (Westpac), argued that it seems certain that the RBA will keep its cash rate at 1.5% but said there will be interest in the statement, on factors including the pressure on mortgage rates from the rise in banks’ funding costs. 

Then we have actual data. We get May updates on retail sales, building approvals and the trade balance. "Of these, retail sales is probably most market-sensitive, with the RBA somewhat concerned over consumer spending,0 the analysts at Westpac argued. 

AUD/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that the daily chart shows that technical indicators have bounced from oversold readings, maintaining their upward slopes but well below their midlines:

"The price is far below all of its moving averages, maintaining the risk skewed to the downside. In the 4 hours chart, the pair is now above a flat 20 SMA, while indicators aim higher within positive territory, supporting additional gains at least toward 0.7440, the immediate resistance."