The AUD/USD pair traded with marginal losses through the Asian session and eroded part of previous session’s strong upsurge to fresh weekly tops.
The Australian Dollar was weighed down by Thursday’s disappointing release of the private-sector capital expenditure (CAPEX) report, which fell short of market expectations and came in to show a rise of 0.4% during March quarter.
Further downside, however, remained limited and the pair now seems to have found decent support near mid-0.7500s on the back of stronger-than-expected Chinese manufacturing and services PMI. The official manufacturing PMI improved to 51.9 and the services PMI ticked higher to 54.9 for May. Being Australia’s largest trading partner, upbeat Chinese macro data underpinned the China-proxy Aussie.
This coupled with the ongoing US Dollar retracement, despite an uptick in the US Treasury bond yields, and a mildly positive trading sentiment around copper prices extended some additional support and helped limit further downside.
Moving ahead, today’s second-tier US economic data – personal income/spending data, usual initial weekly jobless claims and Chicago PMI, followed by Fedspeaks will now be looked upon for some impetus later during the North-American session.
Technical levels to watch
Momentum beyond the 0.7580 immediate resistance is likely to assist the pair to jump back above the 0.7600 handle and head towards testing its next major hurdle near the 0.7645-50 supply zone.
On the flip side, sustained weakness below the 0.7550-40 immediate support might turn the pair vulnerable to head back towards challenging the key 0.7500 psychological mark.