• Fails to capitalize on early up-move led by a modest USD weakness.
• Investors seemed reluctant to place aggressive bets ahead of Chinese PMI.
• Next week’s RBA/important macro releases might provide fresh impetus.
The AUD/USD pair struggled to build on early up-move and has now retreated over 15-pips from session tops.
The US Dollar held on to its mildly weaker tone but holiday-thinned liquidity conditions failed to assist the pair to extend its gain further beyond the 0.7700 handle.
Moreover, traders now seemed reluctant to place any aggressive bets ahead of the official Chinese PMI figures (manufacturing & non-manufacturing, due for release on Sunday and which has the potential to influence demand for the China-proxy Australian Dollar.
Ahead of next week’s scheduled release of important macro releases at the start of a new month, including the keenly watched NFP and the latest RBA monetary policy update, also held investors from initiating any fresh positions and eventually led to a subdued rangebound price action on the last trading day of the week.
Technical levels to watch
Any subsequent retracement is likely to find support near the 0.7675 level, below which the pair seems to head back towards retesting 0.7650-40 intermediate zone before eventually dropping to the 0.7600 handle.
On the upside, a sustained move above the 0.7700 handle has the potential to continue lifting the pair further towards the 0.7745-50 supply zone, which if cleared should assist the pair to aim towards reclaiming the 0.7800 handle.
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