The Australian dollar against the US dollar is experiencing a decline at approximately 0.6430 following China’s negative Caixin Services PMI.

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• AUD/USD trades lower around 0.6430 after China’s downbeat Caixin Services PMI.

The pair currently trades last at 0.64258.

The previous day high was 0.648 while the previous day low was 0.6445. The daily 38.2% Fib levels comes at 0.6467, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6458, expected to provide resistance.

AUD/JPY retreats from the previous day’s gains, trading lower around 0.6430 during the Asian session on Tuesday. The pair is experiencing downward pressure ahead of the key Reserve Bank of Australia (RBA) Interest Rate Decision. Furthermore, China’s Caixin Services PMI for August declined to the reading of 51.8 from 54.1 prior. The reduction in the Chinese services economy weighs on the pair.

According to a Reuters poll, economists are forecasting no change in interest rates on Tuesday, as inflation appears to be moderating, and they expect the rate to remain at 4.10%. All eyes will be on the Reserve Bank of Australia (RBA) Statement’s tone for clear indications of future rate hikes, potentially providing support for the Australian Dollar (AUD) to maintain its strength.

The Aussie pair is unable to sustain support from China’s stimulus measures and the agreement between Country Garden and creditors for an extension on onshore debt repayments worth 3.9 billion yuan ($536 million) boosted the market optimism.

As said, China’s willingness to open up its services industry, coupled with advancements in manufacturing activities, adds to a series of measures aimed at reducing mortgage rates and injecting more liquidity into the economy to underpin the AUD/USD pair.

US Dollar Index (DXY), which compares the Greenback against six other major currencies, trades higher around 104.20 at the time of writing. The steady labor growth in August and the recovery in US Treasury yields helped the buck to maintain its strength.

Furthermore, the buck could experience upward support as investors are still pricing in the odds of a 25 basis points (bps) rate hike by the US Federal Reserve (Fed). Additionally, Federal Reserve Bank of Cleveland President Loretta J. Mester supported the Fed’s hawkish stance and dismissed the possibility of a bias toward rate cuts in a speech on Friday. Market participants await the US Factory Orders (Jul) to gain clear directions.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6435 at the time of writing. Pair opened at 0.6462 and is trading with a change of -0.42 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6459, 50 SMA 0.6602, 100 SMA @ 0.6641 and 200 SMA @ 0.672.

The previous day high was 0.648 while the previous day low was 0.6445. The daily 38.2% Fib levels comes at 0.6467, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6458, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.6444, 0.6427, 0.6409
• Pivot resistance is noted at 0.648, 0.6498, 0.6515

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