AUD/USD Analysis: struggling to retain the 0.6700 level

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6739

Disappointing Australian data kept AUD/USD near multi-month lows.
Australian and Chinese August Manufacturing PMI to set the tone at the weekly opening.
AUD/USD retains the long-term bearish stance, bears eyeing 0.6676.

The AUD/USD pair finished the past week little changed on the downside at around 0.6735, former relevant support. The pair bottomed for the week at 0.6689, recovering just modestly ahead of the close. The intraday slump was the result of another batch of disappointing Australian data, as Building Permits unexpectedly fell a whopping 9.7% monthly basis in July, accumulating a yearly decline of 28.5%. Private Sector Credit in the same month was up by a modest 0.2%, and by 3.1% annual basis. The pair bounced on the back of a better market mood that kept European and American indexes mostly in the green.

Australian and Chinese manufacturing output takes center stage

During the weekend, China released the August NBS Manufacturing PMI which fell to 49.5 down from 49.7 previously, and the Non-Manufacturing PMI which improved to 53.8 from 53.7 previously, also beating the market’s expectations. Australia is set to release the AIG Performance of Manufacturing Index at the weekly opening, previously at 51.3, and the Commonwealth Bank Manufacturing PMI, which also printed 51.3 in the previous month. China will publish the Caixin Manufacturing PMI, foreseen at 49.8 from 49.9.

AUD/USD short-term technical outlook

The AUD/USD pair is in bearish territory according to the daily chart, as it has settled below all of its moving averages, while the 20 DMA develops well below the larger ones after retaining its ability to act as dynamic resistance throughout the week. Technical indicators have recovered modestly within familiar levels, holding below their midlines. In the 4 hours chart, the pair offers a neutral-to-bearish stance, as it remains below all of its moving averages, while technical indicators have recovered modestly within negative levels, lacking clear directional strength. The pair could correct higher on a break above 0.6750, the immediate resistance, but the most likely scenario is a continued decline, particularly if the pair loses the 0.6700 level.

Support levels: 0.6700 0.6675 0.6640

Resistance levels: 0.6750 0.6790 0.6820

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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