AUD/USD struggles near weekly lows, just below 0.7100 handle

Haresh Menghani FXStreet

• The USD preserves the previous session’s upbeat US data-led gains.
• Bulls shrug off better than expected Chinese manufacturing PMI print.
• Traders now eye US economic docket for some meaningful opportunities.

The AUD/USD pair now seems to have entered a bearish consolidation phase and was seen consolidating in a narrow trading band near the lower end of its weekly trading range.

Having faced rejection near the 0.7200 handle earlier this week, the pair came under some additional selling pressure on Thursday following stronger than expected US economy, especially an unexpectedly stronger GDP growth figures.

The advance GDP estimate showed that the US economic growth stood at 2.6% annualized pace in the last quarter of 2018 and the Chicago PMI rose to a reading of 64.7 in February as compared to 56.7 in the previous month.

Upbeat US economic data triggered a fresh leg of an upsurge in the US Treasury bond yields, which provided a goodish lift to the US Dollar and eventually exerted some additional downward pressure on the major.

The China-proxy Australian Dollar held on the defensive and failed to gain any respite from Friday's release of better-than-expected Caixin China manufacturing PMI, which jumped to 49.9 in February from 48.3 in January.

Moving ahead, market participants now look forward to the US economic docket, highlighting ISM manufacturing PMI and revised UoM Consumer Sentiment index, for some fresh impetus on the last trading day of the week.

Technical levels to watch

Immediate support is pegged near the 0.7070 region, below which the pair is likely to accelerate the slide towards the 0.7050-40 intermediate support before eventually falling to the key 0.70 psychological mark. On the flip side, the 0.7130 region now seems to act as an immediate hurdle, which if cleared might assist the pair to make a fresh attempt towards conquering the 0.7200 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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