The US dollar declines on Monday after last Friday. The DXY, reflecting the value of the dollar against a basket of 6 major world currencies, reached a two-week high near the 96.91 mark. Investors prefer the US dollar amid risks of a slowdown in the global economy. The US economy looks more resilient than other major global economies.
On Monday at the beginning of the European session, futures for the dollar index DXY is trading near the mark of 96.68.
Received last Sunday and during the Asian session on Monday, positive macro statistics from China contributed to the growth of Chinese yuan and the currencies of the Asia-Pacific region, as well as a decrease in the US dollar.
The official Purchasing Managers Index (PMI) for the manufacturing sector in China rebounded noticeably in March, hardening to a 6-month high of 50.5 from 49.2 in February, exceeding the forecast of 49.5. The business activity index in the service sector also turned out to be in March (54.8) better than the forecast (54.1) and the previous value (54.3).
The index of purchasing managers (PMI) for the manufacturing sector of China from Caixin in March rose to 50.8 from 49.9 in February. The PMI index from Caixin in March reached the highest point since October, exceeding the level of 50, which separates the growth of activity from the decline.
As a result, the AUD/USD opened today with a gap up by 23 points, and at the beginning of the European session, it was trading near the daily high of 0.7131.
However, by the beginning of the US session, the AUD/USD pair is again decreasing before the publication of important macro data from the USA (in the period from 12:30 to 14:00 (GMT)). Favorable statistics on retail trade and business activity in the US manufacturing sector are expected in March. PMI is expected to grow in the US manufacturing sector (from ISM) to 54.5 against 54.2 in February.
This is a strong indicator that will have a positive impact on the USD when the forecast is confirmed.
On Tuesday, a meeting of the RB of Australia on monetary policy will be held. According to the forecasts of economists, the RBA will keep the interest rate unchanged on Tuesday, at the level of 1.5%, but will hint at the likelihood of an early decrease in the interest rate. This will have a negative effect on AUD.
Publication of the RBA decision on the rate is scheduled for 03:30 (GMT).
Despite the growth during the Asian session, AUD / USD remains under pressure below the key resistance level of 0.7230 (ЕМА200 on the daily chart). Mostly long-term negative dynamics.
In the event of a breakdown of the support level of 0.7110 (EMA50 on the daily chart), AUD / USD will go inside the downward channel on the daily chart towards the support levels of 0.7025, 0.6980, 0.6910 (September 2015 lows), 0.6830 (2016 lows). Short positions are preferred.
Support Levels: 0.7110,0.7100, 0.7025, 0.6980 Resistance Levels: 0.7140, 0.7180, 0.7230, 0.7295 Trading Recommendations
Sell in the market. Stop Loss 0.7150. Take-Profit 0.7100, 0.7055, 0.7025, 0.6910, 0.6830 Buy Stop 0.7150. Stop Loss 0.7090. Take-Profit 0.7180, 0.7230