AUDUSD Rallies to Its 16-Week Highs on USD Weakness, China PMI Reports Mixed

AUDUSD is leading gains among the majors in today’s Asian session as the USD weakened across the board. The currency pair is currently up by 0.79% as it trades around 0.6721. It even traded to its highest levels since February, rallying to 0.6741, despite China’s manufacturing PMI missing consensus.

It would seem that the widespread riots across the US over the weekend weakened the US dollar. This was enough reason for investors to look past the disappointing Chinese manufacturing PMI report for May which printed at 50.6 versus the 51.1 forecast. It may have helped that Australia’s largest trading partner clocked in a 53.6 reading for its services PMI which was higher than the 53.5 consensus. It’s also worth pointing out at the Caixin manufacturing PMI (privately-produced by Markit) printed at 50.7 compared to expectations at 49.7.

Download our Q2 Market Global Market Outlook

AUDUSD Outlook

On the daily time frame, it can be seen that AUDUSD traded past resistance at the 200 SMA. When you enroll to our free forex trading course, you will learn that some technical analysts often interpret a break of a key resistance level as a sign that buyers are dominating market sentiment. If this turns out to be true, we could soon see AUDUSD rally to the 0.7000 handle where it may test its December 31 highs.

Don’t miss a beat! Follow us on Telegram and Twitter.

On the other hand, the 1-hour time frame shows that the currency pair could fall to support around 0.6665. This price offers a confluence of support. For one, there is the rising trendline from connecting the lows of May 25, May 27, May 28, and May 19. This price also coincides with previous highs. Finally, it aligns with the 61.8% Fib level (drawing the Fibonacci retracement tool from the low of May 29 to the high of June 1).More content