The AUD/USD pair rebounds from its lowest level since early May, attracting buyers and halting a nine-day decline. A recovery in equity markets weakens the USD, providing some support to spot prices. However, concerns about China’s economic slowdown could limit gains as traders await the US PCE Price Index release.
During the Asian session on Friday, the AUD/USD pair edges higher, trading below the mid-0.6500s after hitting a low around 0.6515. The USD remains range-bound against a basket of currencies, awaiting the Fed’s rate-cut direction. The upcoming US PCE Price Index release will be crucial in influencing future Fed policy decisions and USD demand.
Despite positive US economic data, including a 2.8% GDP growth in the second quarter and a drop in Initial Jobless Claims, concerns about China’s economic slowdown may hold back aggressive bullish bets on the AUD. It is essential to monitor follow-through selling to confirm if the AUD/USD pair has bottomed out in the near term.
Analysis:
The AUD/USD pair has shown resilience after a prolonged downtrend, supported by a recovery in equity markets and subdued USD price action. However, concerns about China’s economic slowdown and the upcoming US PCE Price Index release could impact future market movements. Traders should watch for follow-through selling to confirm a near-term bottom for the AUD/USD pair.