AUD/USD rebound approaches 0.6850 with eyes on RBA, FOMC Minutes and US NFP

  • AUD/USD renews intraday high while bouncing off two-year low, pares the biggest weekly loss in four.
  • US holiday, downbeat yields probe USD bulls amid a lackluster session.
  • Second-tier Aussie data may entertain buyers amid hawkish hopes from the RBA.
  • FOMC Minutes, US NFP will be crucial as recession fears probe the Fed’s hawks.

AUD/USD renews intraday high around 0.6830 as it consolidates the biggest weekly loss in four around a two-year low. The Aussie pair’s latest rebound could also be linked to the US dollar’s pullback amid a quiet session and the US holiday.

The quote slumped to the lowest levels in two years as the recession risks intensified on Friday. The risk-aversion wave took clues from the downbeat US PMI, as well as fears of economic recession. However, recessing hawkish bets on the Fed’s next move appears to have triggered the Aussie pair’s corrective pullback amid a sluggish session.

Talking about data, Australia’s TD Securities Inflation for June eased to 0.3% MoM and 4.7% YoY, versus 1.1% and 4.8% respective priors. 

The US ISM Manufacturing PMI for June slumped to the lowest levels in two years, to 53.0 versus 54.9 expected and 56.1 prior. The details suggested the Employment Index declined to 47.3 from 49.6 and New Orders Index fell to 49.2 from 55.1. Finally, Prices Paid Index dropped to 78.5 from 82.2, versus market forecasts of 81.0. It should be noted that the final readings of the S&P Global Manufacturing PMI for June dropped to the lowest level since July 2020, to 52.7 versus the flash estimate of 52.4 and 57 in May.

On the other hand, a reduction in the market’s bets for the Fed’s 0.75% rate hike in July, as per the CME’s FedWatch tool, probes the US dollar buyers.

Even so, the Commonwealth Bank of Australia (CBA) anticipates the AUD/USD prices to drop to as low as 0.6200 amid cautious prediction of the economic growth and the Reserve Bank of Australia’s (RBA) next moves. That said, the Aussie pair is well-set for a 0.50% rate hike on Tuesday but the recent recession fears may challenge the pair buyers.

That said, the AUD/USD traders may keep consolidating the recent losses around the multi-month low amid the US holiday and the US dollar pullback. However, the broad risk-off mood can exert downside pressure on the pair ahead of the key RBA, Federal Open Market Committee (FOMC) Minutes and the US Jobs report for June.

Technical analysis

Despite bouncing off the 61.8% Fibonacci Expansion (FE) of April-June moves, near 0.6770, AUD/USD remains on the bear’s radar unless crossing the previous support line from May 12, around 0.6870 by the press time. 

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