Talking Points: Australian Dollar, Delta Variant, Chinese PMIs, and AUD/USD The Delta version of Covid is getting increasingly difficult to recover. For Wednesday’s APAC session, China’s NBS manufacturing PMI will be released. Is there more deterioration ahead for the AUD/USD as it falls below the 200-day SMA? The Asia-Pacific Outlook for Wednesday Risk-sensitive currencies, such as the Australian Dollar, slumped overnight as global economic recovery headwinds appeared to be strengthening. The highly transmissible Covid Delta form, which is rapidly spreading over the world, is one of the key worries. The viral strain has prompted regional lockdowns across Australia, notably in Sydney, the country’s most populous city. While Australia has been effective in managing outbreaks, immunization efforts in comparison to other modern economies have fallen short. Bill Bowtell, an Australian health policy advisor, advises compressing the period between the first and second AstraZeneca doses. Furthermore, Mr. Bowtell anticipates that additional communities will be placed under lockdown as a result of government blunders in vaccination security. In other countries, despite better vaccination rates, US health officials have become increasingly concerned about the development of Delta variations. To help curb the spread and protect the people, Los Angeles County has imposed a new voluntary mask mandate. Nonetheless, the Centers for Disease Control and Prevention (CDC) predicts that the strain will become the dominant variation in the United States. Despite mounting concerns in the United States and overseas, Wall Street trade saw equity indexes rise. The Nasdaq 100 index, which is heavily weighted in technology, rose 0.33 percent. Inflows into the safe-haven US Dollar were also seen overnight, with the DXY index trading higher. Across the curve, the Treasury market experienced some moderate buying pressure. The benchmark 10-year yield declined by around a half-percentage point. The National Bureau of Statistics (NBS) is due to issue purchasing managers’ index statistics for the manufacturing and services sectors in China’s Asia-Pacific session on Wednesday. The manufacturing PMI for June is predicted to come in at 50.8, down from 51.0 last month, according to the DailyFX Economic Calendar. AUD/USD Technical Predictions: The technical position of the Australian Dollar against the US Dollar dropped overnight as the currency pair fell below the 200-day Simple Moving Average (SMA). The pair is trending downward, aiming for the swing low from June. If the price falls to a new monthly low, selling pressure will likely increase, pushing the AUD/USD to the September swing high shown in the chart below. TradingView was used to construct this AUD/USD daily chart. TRADING RESOURCES FOR THE AUSTRALIAN DOLLAR —- Thomas Westwater, a DailyFX.com analyst, wrote this article. Use the comments area below to reach Thomas, or follow him on Twitter at @FxWestwateron.
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