The Australian Dollar started the new trading week with a rise in volatility as forex traders received two reports on the the Australian services sector which were mixed with an increase in the final Composite PMI reading for July. US President Trump is increasing his trade war with China, but the final Chinese July Manufacturing PMI was revised higher. With the US Dollar coming under pressure as Chinese data shows signs of bottoming out, will the AUDUSD reverse on the back of short-covering? Today’s fundamental analysis will take a look at the upside potential as well as downside risk.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian AiG Performance of Services Index: The Australian AiG Performance of Services Index for July was reported at 43.9. Forex traders can compare this to the Australian AiG Performance of Services Index for June which was reported at 52.2.
- Australian CBA Services PMI and CBA Composite PMI: The Final Australian CBA Services PMI for July was reported at 52.1. Forex traders can compare this to the previous Australian CBA Services PMI for July which was reported at 51.9. The Final Australian CBA Composite PMI for July was reported at 52.3. Forex traders can compare this to the previous Australian CBA Composite PMI for for July which was reported at 51.8.
- Australian TD Securities Inflation: Australian TD Securities Inflation for July increased by 0.3% monthly and by 1.8% annualized. Forex traders can compare this to Australian TD Securities Inflation for June which was reported flat at 0.0% monthly and which increased by 1.6% annualized.
- Chinese Caixin Services PMI and Chinese Caixin Composite PMI: The Chinese Caixin Services PMI for July was reported at 51.6. Economists predicted a figure of 52.0. Forex traders can compare this to the Chinese Caixin Services PMI for June which was reported at 52.0. The Chinese Caixin Composite PMI for July was reported at 50.9. Forex traders can compare this to the Chinese Caixin Composite PMI for for June which was reported at 50.6.
Last Friday’s NFP report came in as expected, the US adds workers but not hours. US Fed Chair Powell has called the US economy strong with a positive outlook after cutting interest rates by 25 basis points. Last Thursday, the ISM Manufacturing PMI came in weaker than expected. Will today’s ISM Non-Manufacturing PMI follow suit and disappoint forex traders? How will this impact the AUDUSD? Follow the PaxForex Daily Fundamental Analysis and take the profitable side of this currency pair!
Here are the key factors to keep in mind today for US Dollar trades:
- US Markit Services PMI and Markit Composite PMI: The US Final Markit Services PMI for July is predicted at 52.2 and the US Final Markit Composite PMI is predicted at 51.6. Forex traders can compare this to the previous US Markit Services PMI for July which was reported at 52.2 and to the previous US Markit Composite PMI which was reported at 51.6.
- US ISM Non-Manufacturing PMI: US ISM Non-Manufacturing PMI for July is predicted at 55.5. Forex traders can compare this to the US ISM Non-Manufacturing PMI for June which was reported at 55.1. The ISM Non-Manufacturing Business Activity Index for July is predicted at 58.3. Forex traders can compare this to the ISM Non-Manufacturing Business Activity Index for June which was reported at 58.2.
Should price action for the AUDUSD remain inside the or breakout above the 0.6745 to 0.6800 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.6765
- Take Profit Zone: 0.6995 – 0.7080
- Stop Loss Level: 0.6700
Should price action for the AUDUSD breakdown below 0.6745 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.6700
- Take Profit Zone: 0.6575 – 0.6625
- Stop Loss Level: 0.6765
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