AUD/USD Retreats from Monthly Tops on a Softer PMI Data; DXY Rebound in Focus

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EnclaveFX
Jul 22, 2022
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The AUD/USD pair consolidated its recent losses after refreshing monthly highs as it recovered from yesterday’s daily lows 0.6840 levels.  Currently as of writing the pair is at 0.69217 levels after dropping towards the 0.6916 levels. The Aussie pair’s latest losses could be linked to the downbeat prints of Australia’s flash readings of S&P Global PMIs for July. The pair also bears the burden of the US dollar’s rebound amid sour sentiment.

 Australia’s S&P Global Manufacturing PMI eased to 55.7 in July versus 56.2 prior and 56.4 expected. On the other hand, the US Dollar Index (DXY) picked up bids to refresh its intraday high around 106.70, up 0.12% on a day, as risk-aversion returned among market participants. t’s worth noting that the DXY slumped the previous day as it traced the US Treasury yields wherein the benchmark 10-year bond coupons marked the biggest daily slump since mid-June the previous day.

Despite the latest pullback, AUD/USD remains well beyond the weekly support line, at 0.6890 by the press time, which in turn keeps buyer’s hopeful of challenging the 50-DMA hurdle surrounding 0.6975. Based on the above H1 chart for the pair, it holds comfortable above the SMA200 (light blue line) which has now turned into a strong support for further gains. But on the flip side with the DXY gaining momentum it might be likely that the pair suffers a pullback from the highs