- AUD/USD keeps bounces off intraday low after Aussie Retail Sales release.
- Australia Retail Sales confirm -1.8% preliminary forecasts for June, China Caixin Services PMI crosses prior readouts in July.
- NSW infections reverse the previous two-day downtrend, risk appetite sours.
- US ADP Employment Change, ISM Services PMI to decorate calendar, qualitative factors will be the key.
AUD/USD remains directed to the 0.7400 resistance, recently bounces off the day’s low, amid early Wednesday. In doing so, the quote ignores downbeat Aussie Retail Sales and firmer Chinese PMI figures, amid dull markets, while keeping the post-RBA optimism ahead of important US data.
Aussie Retail Sales confirmed -1.8% MoM preliminary figures for July, versus +0.4% prior, during the latest release. The data failed to offer any notable AUD/USD moves by matching previous forecasts. On the contrary, China’s Services PMI for July rose past 50.3 to 54.9.
Market sentiment sours as covid woes escalate in the US, China and Australia. The US Centres for Disease Control and Prevention (CDC) issued a temporary moratorium, expiring on October 03, after noting the heaviest jump in infections in February. On the other hand, China also marked higher covid numbers, 96 versus 90, whereas Australia’s New South Wales (NSW) snaps the previous two-day fall in the virus figures with the latest 233 level.
Also challenging the market sentiment were the geopolitical tussles between the Western allies and Iran, as well as China. Additionally, deadlock over US President Joe Biden’s $1.0 trillion infrastructure spending plan in the Senate and uncertainty over the Fed’s next moves also weigh on the risk appetite and AUD/USD.
That said, S&P 500 Futures print mild losses despite upbeat Wall Street close whereas the US 10-year Treasury yields stay firmer around 1.18% by the press time.
Looking forward, early signal for Friday’s US Nonfarm Payrolls (NFP), namely US ADP Employment Change for July, will join the ISM Services PMI for the said month to direct short-term AUD/USD moves. Above all, pre-NFP mood battles RBA’s hawkish tilt to challenge the pair’s short-term performance.
Technical analysis
Multiple levels marked since early July, also challenged in August–September 2020 period, questions AUD/USD upside momentum around 0.7000-7010. The resistance area draws additional strength from 21-DMA. Hence, the pair remains directed towards the yearly low near 0.7290 until crossing the 0.7010 hurdle.