AUD/USD Deflates to 200-DMA, Aus GDP-Led Rally Short-Lived
The AUD/USD pair reversed almost a quarter of the Australian GDP-induced sharp rally as we head towards late-Asia, with poor risk tone on weak Chinese PMI readings extending bearish pressure on the major.
AUD/USD retests 200-DMA to the downside
Currently, the AUD/USD pair now trades +0.57% higher at 0.7278, unable to take-out 0.73 barrier. The Aussie eased-off ten-day peaks as sellers took over control after the major hit the strong resistance placed at 0.73 handle, reverting towards the crucial 200-DMA resistance turned support located at 0.7265 levels.
Earlier this session, the AUD/USD pair spiked nearly 70-pips in an immediate reaction to a stronger revision to the first quarter Australian GDP numbers. However, the spike was quickly faded as China slowdown fears resurfaced after the Chinese manufacturing sector activity contracted sharply in May, Caixin PMI report showed today. More so, extended sell-off in copper and oil prices, further weighed on the resource-linked AUD.
Looking ahead, after an eventful Asian session, attention now shifts towards the American session, with the ISM manufacturing PMI report on the cards. While Australian retail sales and trade data due tomorrow will be closely watched for further signs of strength in the OZ economy.
AUD/USD Levels to watch
The pair finds the immediate resistance at 0.7299/0.7300 (Daily high/ round number) above which gains could be extended to the next hurdle located at 0.7350 (psychological levels). On the flip side, the immediate support located at 0.7265/51 (200 & 20-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie 0.7214/12 (5 & 10-DMA).