AUD/USD seesaws near 0.6920 as buyers catch a breath under 21-DMA
- Lack of fresh clues, profit booking stops further upside after a rally.
- PMIs from Australia and the US will be observed for fresh impulse.
- The US-China trade story can also entertain traders.
Following a strong increase due to the US Dollar (USD) decline and a broad rush towards commodities, the AUD/USD pair takes a halt in its rally beneath 21-day moving average (DMA) as it trades near 0.6920 during the early Asian session on Friday.
Like all other commodity-linked currencies that benefited from the USD’s decline, the Aussie also took advantage of the greenback’s weakness despite bearish messages suggesting another rate cut from the Reserve Bank of Australia (RBA) by its Governor Philip Lowe.
Adding to the pair’s upside could be positive news from the US and China concerning the likelihood of trade talks at the G20 meeting. China is Australia’s largest customer (together with being the world’s biggest commodity user) and hence any positive news for the dragon nation uplifts the Australian Dollar (AUD).
Buyers seem running short of steam off-late as no new data/events took place off-late, giving room for profit booking amid initial hours of the fresh session.
While few second-tier US data concerning Existing Home Sales and Purchasing Manager Index (PMI) might entertain traders during the later part of the day, Aussie PMIs and political news surrounding the US-China trade developments might offer fresh clues to determine immediate moves of the pair.
The US Markit Manufacturing PMI is likely to soften to 50.4 from 50.5 in June while the same gauge for Services PMI may increase to 51.0 from 50.9. Further, Existing Home Sales for May can rise to 5.25M against 5.19M previous readouts.
On the other hand, investors will also analyze Aussie PMIs compared to May month releases wherein Manufacturing PMI flashed 51.0 and the Services PMI registered 51.5.
Other than the 21-DMA level of 0.6931, early-month low near 0.6963 and the 0.6980 level comprising the 50-DMA could keep challenging the buyers, which in turn can trigger the pair’s pullback to 0.6880, 0.6860 and the latest low near 0.6830.
This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.