- The AUD/USD pair is posting its third consecutive day of gains, up more than 0.60% to 0.6470.
- The August PMIs for the US and Australia were lower than expected.
- Dovish Fed bets put pressure on Dollar.
The pair AUD/USD it gained ground in the session on Wednesday, driven by the weakness of the dollar. The US released lower-than-expected PMIs, but the services sector held firm. At the same time, Australian numbers also fell short of expectations, with an eye on Jerome Powell’s speech on Friday.
Weak US PMIs fueled a decline in US yields, weakening the USD
US S&P Global PMIs came in weaker than expected. The manufacturing PMI fell to 47, in contrast to the projection of 49.3, while the services index, although below expectations, remained within the expansion range at 51. Despite reporting weak data, the sector American services continue to resist. At the same time, the UK, German and Australian services indices all fell below 50, and the dollar could continue to gain ground as the US economy appears to be the last man standing.
Reacting to weak economic activity data, 2-, 5-, and 10-year US Treasury yields are showing sharp declines of more than 1.50%, suggesting that markets are betting that the Federal Reserve (Fed) won’t be as aggressive as expected in the remainder of the year. That said, Jerome Powell’s speech at the Jackson Hole Symposium on Friday will be key for investors to continue to shape their expectations for the upcoming Fed meetings.
On the Australian dollar side, the Australian manufacturing and services PMIs for August were lower than expected at 49.4 and 46.7, respectively. The weakening of China and the tightening monetary policy of the Reserve Bank of Australia (RBA) are the main reasons for the weakening of the Australian economy.
AUD/USD levels to watch
Looking at the daily chart, the technical outlook for AUD/USD remains neutral to bullish as the bulls continue to regain their momentum. The Relative Strength Index (RSI) indicates a decline in bearish momentum with a positive slope below its midline, while the Moving Average Convergence (MACD) features lower red bars. Furthermore, the pair is below the 20,100 and 200-day SMAs, implying that bears are in control on a larger scale, while buyers still have work to do.
Support levels: 0.6440, 0.6415, 0.6400.
Resistance levels: 0.6470, 0.6490, 0.6500.
daily chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
