AUD/USD bears remain hopeful at three-week low near 0.6650, focus on RBA, US NFP and China PMI

• AUD/USD holds lower grounds at multi-day bottom after two-week downtrend.
• US Dollar bulls cheer upbeat data despite witnessing a pullback on Friday.
• Downbeat Aussie numbers prod RBA hawks ahead of this week’s monetary policy meeting.
• A slew of US data including ISM PMI, NFP will offer a busy week ahead.

AUD/USD begins the key week without any surprises, making rounds to 0.6650 after declining in the last two consecutive weeks. In doing so, the Aussie stays depressed at the lowest levels in three weeks as market players await this week’s Reserve Bank of Australia (RBA) Monetary Policy Meeting announcements and the US employment report for July, mainly the Nonfarm Payrolls (NFP).

That said, the downbeat Aussie data contrasted with the firmer US statistics and weighed on the Aussie pair the last week. However, the weekend headlines from China and the Federal Reserve (Fed) put a floor under the AUD/USD price.

During the weekend, China's State Council Information Office conveyed a surprise press conference by Vice Chairman of the National Development and Reform Commission Li Chunlin and officials from the Ministry of Industry and Information Technology, the Ministry of Commerce and the State Administration for Market Regulation to unveil more measures to boost the consumption.

On the other hand, Federal Reserve Bank of Minneapolis President Neel Kashkari flagged fears of job losses and slower growth while praising the inflation outlook. The policymaker also criticized the central bank’s aggressive monetary tightening campaign to tamp down price surges.

On Friday, Australia Retail Sales slumps 0.8% MoM in June versus 0.0% expected and prior growth of 0.7%. It should be noted that the second-quarter Producer Price Index (PPI) data have been disappointing with 3.9% YoY and 0.5% QoQ figures. Previously, softer prints of Australian inflation and PMI numbers justified the RBA’s latest pause and pushed back the AUD/USD bulls.

Talking about the US statistics, the US Federal Reserve’s (Fed) favorite inflation gauge, namely the Core Personal Consumption Expenditure (PCE) Price Index, came in 4.1% YoY for June versus 4.2% expected and 4.6% prior. Further details revealed that the Personal Income softened to 0.3% versus 0.5% expected and previous readings whereas the Personal Spending rose 0.5% from 0.4% market forecasts and 0.1% prior. Additionally, the final readings of the Michigan Consumer Sentiment Index for July eased to 71.6 from the initial estimations of 72.6 while the University of Michigan’s (UoM) 5-year Consumer Inflation Expectations also edged lower to 3.0% from 3.1% expected and prior.

That said, strong prints of the US Gross Domestic Product (GDP) Annualized for the second quarter (Q2) joined the upbeat figures of the US Durable Goods Orders for June to allow the US Dollar to stay firmer for the second consecutive week. Also likely to have favored the US Dollar, is the European Central Bank’s (ECB) dovish hike and emphasis on the data-dependency of the next rate decision.

Amid these plays, Wall Street closed positive and the yields retreated together with the US Dollar. Even so, the US Dollar Index (DXY) marked two consecutive weekly gains by the end of Friday’s trading.

Moving on, China’s official PMIs for July will entertain intraday traders of the AUD/USD pair. However, major attention will be given to the RBA decision, as it is likely to announce a 0.25% rate hike, as well as the early week ISM PMIs from the US ahead of Friday’s Nonfarm Payrolls (NFP) data.

Technical analysis

A daily closing beneath the 0.6690 support confluence comprising the 100-DMA and a two-month-old rising trend line keeps AUD/USD bears hopeful of witnessing further downside towards testing the late June swing low of near 0.6600.