Aud Retreats On Mixed Pmi

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Aud Retreats On Mixed Pmi

Australian Dollar (Aud) Retreats On Mixed Pmi

The losing streak of the Australian Dollar (AUD) continues for the 8th consecutive trading day. The recent bout of selling happened after the release of mixed Australian PMI data on Wednesday.

Additionally, China's economic activity remains sluggish, which is a major drag on the Australian Dollar (AUD). According to experts, the recent rate cut from the PBoC is a sign that the weakness of the Chinese economy has become a major concern.

Weak Iron Ore Prices Weigh On Aud

The weakness in the Chinese economy has also put the iron ore prices under pressure. As the exports of iron ore are one of Australia's major exports, any decline in the Chinese economy means less demand for iron ore. That's yet another reason why the AUD is on the back foot against the G10 currencies.

Right now, the Iron ore prices are near 108.00 which is the lowest level in the last 3 weeks. The recent weakness in the Iron ore is also something which is putting pressure on the Australian Dollar (AUD).

On the other hand, the US dollar is also under pressure, which is why the downside of the AUD/USD is limited. However, once we get the US PMI and the earnings release from the top US stocks, we will see some action in the US dollar as well.

The Australian Dollar (AUD) is trading against the US Dollar at around 0.6610 with a bearish bias. If we look at the AUD/USD D1 chart, the price action is contained inside a descending price channel. Additionally, an RSI reading below 50 is also a sign of bearish strength.

For now, the AUD/USD is on the verge of testing the lower boundary of the price channel near 0.6600. Once the AUD/USD breaks out of this descending channel, the next stop will be around 0.6590 followed by 0.6550.

If we look at the upside, the 9 EMA is acting as a key resistance near 0.6671. After that, the next key handle is around 0.6700, which can stop the US dollar from advancing against the Australian dollar.

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