AUD/USD drops towards 0.7300 on downbeat China Caixin Maunfacturing PMI
- AUD/USD remains pressured, refreshed intraday low after China data.
- China Caixin Manufacturing PMI for July dropped to 50.3, Aussie data came in mixed earlier in the day.
- Market sentiment dwindles amid US infrastructure spending talks, Sino-US tussles, Iran headlines mostly ignored.
- US ISM Manufacturing PMI, stimulus updates will be the key.
AUD/USD takes offers around 0.7330, down 0.14% intraday, amid early Monday. In doing so, the Aussie pair reacts to softer-than-expected and prior China data while paying a little heed to modest market sentiment.
China’s Caixin Manufacturing for July dropped below 51.3 prior and 51.0 expected to 50.3.
Read: The Caixin China Manufacturing PM: 50.3 vs 51.3 in June
Earlier in the day, Australia’s AiG Performance of Mfg Index and Commonwealth Bank Manufacturing PMI for July disappointed AUD/USD traders as both the readings fell below 63.2 and 58.6 previous readouts to 60.8 and 56.9 respectively. Further, ANZ Job Advertisements for July marked -0.5% figures versus 3.0% prior whereas TD Securities Inflation rose past 0.4% earlier print to 0.5%. It’s worth noting that China’s official activity data for July, namely NBS Manufacturing PMI, eased below 50.8 forecast to 50.4 in July during the weekend.
Other than the mixed data, easing covid pessimism in Australia and increasing vaccinations, coupled with the US Senate discussions over President Joe Biden’s infrastructure spending also test AUD/USD sellers.
Although the virus-led lockdown is likely to remain present till August 08 in Queensland, New South Wales (NSW) reports an easy 207 infections versus 212 marked the previous day. Elsewhere, the US figures are receding and Health official Anthony Fauci said, per CNBC, that the US is less likely to return to the lockdown.
Elsewhere, the US and the UK allege Iran over the last Thursday’s attack of Israeli oil cargo whereas the Sino-American tussles escalate, this time over the regulation of Beijing-based securities.
Amid these plays, S&P 500 Futures gain half a percent and the US 10-year Treasury yields ease one basis point to 1.23% by the press time.
Looking forward, updates over the US stimulus will be the key whereas the US ISM Manufacturing PMI for July, expected 60.8 versus 60.3 prior, may also entertain the AUD/USD traders. However, sellers are likely to remain hopeful.
Technical analysis
An eight-day-old support line holds the key to fresh AUD/USD downside targeting the yearly low of 0.7288, a break of which will direct quote towards October 2020 top near 0.7244. Meanwhile, recovery move may initially confront a five-week-old resistance line near 0.7385 before attacking the multiple resistance area surrounding the 0.7400 threshold. Overall, AUD/USD bears are in control.