Australian dollar, AUD / USD, PMI, service sector call points
- Australian dollar fundamental prospects for contracting in the service sector are being overshadowed
- In a weak economic situation, there may be a weak trading session at the end of the week
- AUD / USDThe technical outlook is improving, but the lower road may be difficult to cross
Friday’s Asia-Pacific outlook
Trade in Asia-Pacific began with economic data from Australia. Growth in the country’s service sector slowed in July, while output growth slowed, according to IHS Markit’s PMI data. The index of the service sector fell from 56 to 44.2 and the index of the manufacturing industry from 56.8 to 58.6. Labor force indicators in the PMI surveys remained positive, but the decline in business activity led to a sharp decline in services. The Australian dollar gave a muted reaction against Greenback. However, the currency pair is on the right track in recording its fourth weekly loss.
Until recently, Australia’s economic recovery shot all the cylinders, but a new wave of Covid-19 infections – driven by the Delta variant – forced policymakers to reintroduce austerity measures. New South Wales (NSW) registered 124 cases on Thursday, up from 110 the previous day. The state of Victoria also saw higher cases. The pace is likely to lead to an extension of the restrictions. This has boosted growth prospects, with closures costing nearly $ 300 million a day, said treasurer Josh Frydenberg. The weak retail sales figure for June highlights locking in adverse effects affects consumption.
Despite the deteriorating situation in Australia, stock indices across the region may generally rise higher after US equities close. The rosy income of companies has been under a wider market building. However, regional risk trends may continue to increase inequalities between equity benchmarks. Hong Kong Hang Seng Index (HSI) will be lower next week regulatory fears drove the continent outflow. At the same time, China’s technology-rich CSI 300 index is on track to see its second week of growth.
Elsewhere, oil Benchmarks rose overnight, prolonging the setback from the beginning of this week. Crude oil The price of New York futures rose 2.29% on Thursday. Energy traders will see global supply tighten as demand increases from the United States and Europe. The rise in weekly U.S. crude oil stocks surprised analysts, but gasoline and other fuel products fell, supporting the outlook for demand growth. Meanwhile, China is releasing oil reserves from its strategic reserve. The move is likely to cool high prices, but it could also kill Chinese oil imports.
Japanese markets will remain closed on public holidays. Tokyo will officially start the Olympics on Friday night. Fans are not allowed to participate in the game due to Covid restrictions. Thailand will provide trade data for June. The economic dock is otherwise empty, leaving traders to wait for the future. The European Central Bank (ECB) signaled overnight its provincial policy remains in place. Next week, the Federal Reserve will release its interest rate decision as traders await guidance on narrowing talks.
AUD / USD technical outlook:
AUD /USD is trying to prolong the setback from the beginning of this week, when prices fell to a fresh lower level of the year. A positive deviation in the relative strength index (RSI) suggests that negative energy may be depleted. This view can be reinforced if the MACD line crosses the oscillator signal line, which seems likely. A break above the September fluctuation, at a height of 0.7413, may amplify the upward movement, with a declining 26-day EMA being a possible test above this level. However, the longer-term trend is even more negative, as traders may hit the sales button harder.
AUD / USD daily chart
The chart has been created TradingView
AUSTRALIAN DOLL TRADE RESOURCES
– Written by DailyFX.com analyst Thomas Westwater
Use the comments section or below to contact Thomas @FxWestwaterTwitter