News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • $USD fresh 2021 high didn't get much traction on the first test above resistance, but it's been quite the move since last week. Friday should be a big day for the USD - PCE, ISM and Sentiment numbers
  • Gold and silver not having a good day so far, rising US Treasury yields is a headwind for precious metals and non-interest bearing assets in general #trading $XAUUSD $XAGUSD
  • there it is $USDJPY up for a test of the 2021 high fibo level at 111.61, next major level at 112.50 this zone has held the highs in 2019, 2020 and so far in 2021
  • ...let's see how far the brinkmanship goes and whether the rating agencies feel a rating downgrade is necessary for the constant pressure on its finances
  • - Financial markets have brought forward prospects for BoE tightening into 2022, this is not supportive for inflation surge
  • Treasury Secretary Yellen will no doubt be touching on this at today's Senate Finance Committee meeting, but she has sent a formal letter to Congress to say the US will likely hit its debt ceiling by October 18th
  • US likely to hit debt ceiling by October 18th - Treasury Secretary Yellen
  • - Signal from 5y5y inflation measures is not troubling
  • BoE's Mann - Price growth for natural gas is pretty extreme, but need to look if it will continue $GBP
Aussie Dollar Slide May Resume on PMI Contraction, Extended Lockdowns

Aussie Dollar Slide May Resume on PMI Contraction, Extended Lockdowns

Thomas Westwater, Analyst

Australian Dollar, AUD/USD, PMIs, Services Sector- Talking Points

  • Australian Dollar fundamental outlook darkens as services sector contracts
  • Sparse economic docket may see lackluster trading session to end the week
  • AUD/USD’s technical outlook improves but path lower may be hard to break

Friday’s Asia-Pacific Outlook

Asia-Pacific trade kicked off with downbeat economic data out of Australia. The country’s services sector saw a contraction in growth for July, while manufacturing growth slowed, according to PMI data from IHS Markit. The services sector index fell to 44.2 from 56, and the manufacturing index fell to 56.8 from 58.6. Labor gauges within the PMI surveys remained positive, but a plunge in business activity led the sharp services contraction. The Australian Dollar gave a muted reaction against the Greenback. However, the currency pair is on track to record its fourth weekly loss.

Until recently, the Australian economic recovery was firing on all cylinders, but a new wave of Covid-19 infections—driven by the Delta variant—forced policy makers to reimpose lockdown measures. New South Wales (NSW) recorded 124 cases on Thursday, up from 110 the day prior. Victoria state also saw cases tick higher. The pace will likely lead to an extension of restrictions. This has upended growth prospects, with the lockdowns costing nearly A$300 million per day, according to Treasurer Josh Frydenberg. June’s weak retail sales figure highlights the ill effect lockdowns have on consumption.

australia pmi

Despite the worsening situation in Australia, equity indexes across the region may edge up after US stocks closed mostly higher. Rosy corporate earnings have undergirded broader market sentiment. Still, regionalized risk trends may continue fueling some disparity between stock benchmarks. Hong Kong’s Hang Seng Index (HSI) remains lower on the week after regulatory fears drove mainland outflows. Meanwhile, China’s tech-heavy CSI 300 index is on track to see a second weekly gain.

Elsewhere, oil benchmarks rose overnight, extending a rebound from earlier this week. Crude oil futures in New York climbed 2.29% Thursday. Energy traders see global supply tightening as demand from the United States and Europe pick up. A rise in weekly US crude oil inventories surprised analysts, but gasoline and other fuel products fell, which supports the rising demand outlook. Meanwhile, China is reportedly releasing oil reserves from its strategic reserve. The move likely aims at cooling off high prices but could also cull Chinese oil imports.

Japan’s markets will remain closed for a national holiday. Tokyo will officially kick off the Olympic Games on Friday night. Fans are barred from attending the game’s events due to Covid restrictions. Thailand will report trade data for June. The economic docket is otherwise empty, leaving traders looking ahead to next week. Overnight, the European Central Bank (ECB) signaled its dovish policy will stay in place. Next week, the Federal Reserve will release its interest rate decision, when traders expect guidance on taper talks.

AUD/USD Technical Outlook:

AUD/USD is attempting to extend a rebound from earlier this week when prices dropped to a fresh yearly low. Positive divergence in the Relative Strength Index (RSI) hints that downside energy may be exhausted. That view could be reinforced if the MACD line crosses above the oscillator’s signal line, which appears likely. A break above the September swing high at 0.7413 could amplify upside movement, with the falling 26-day EMA serving as a possible test above that level. Still, the longer-term trend remains skewed for more downside, which may see traders hit the sell button on strength.

AUD/USD Daily Chart


Chart created with TradingView


--- Written by Thomas Westwater, Analyst for

To contact Thomas, use the comments section below or @FxWestwateron Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.