During Wednesday's early European trading session, the AUD/USD currency pair flashed green and succeeded in extending its bullish bias towards the 0.6900 level due to the subdued US dollar. The reason for the modest gains in the currency pair could also be attributed to the upbeat Chinese PMI data, which initially overshadowed the sluggish Australian housing data t this particular time, the AUD/USD is trading at 0.6914 and consolidating in the range between 0.6886 and 0.6922.
However, the upside in currency pair was capped by the depressed Aussie Building Permits data. At the data front, the data showed Building Permits in Australia dropped by 16.4% month-on-month in May compared to forecasts for a 10% decline, having dropped by 1.8% in April.
In the meantime, China's Caixin PMI increased to 51.2 in June, exceeded expectations for 50.5, and up from May's print of 50.7. A reading above 50 represents expansion. The above-forecast Caixin data supported the gains in the Aussie dollar.
Other than data, the mixed tone surrounding the market turned out to be one of the major events to keep a lid on any additional gains in the pair. However, the concerns about surging coronavirus cases around the world continued weighing on investors' sentiment. As per the latest report, the US coronavirus cases increased by more than 40,000 on Tuesday in key states, such as Florida and California, which gradually overshadowed the prospects for a sharp V-shaped global economic recovery and exerted downside pressure on risk sentiment.
As a result, the equity markets turned into the cautious mood, and a reliable pickup in the US Treasury bond yields underpinned the safe-haven USD. The broad-based US dollar erased its early-day gains and edged lower despite the increasing coronavirus cases in most nations. However, the subdued sentiment in the US dollar turned out to be one of the key factors that kept the currency pair higher. Whereas, the dollar index, which traces the greenback against a box of six other currencies, was mostly flat at 97.343 at 2:50 AM ET (0650 GMT).
The investors will keep their focus on the US economic docket, which will show the release of the ADP report on private-sector employment and ISM Manufacturing PMI. The minutes of the fresh FOMC monetary policy meeting will also influence the USD price dynamics and produce some short-term trading opportunities later this Wednesday.
Daily Support and Resistance
Pivot Point 0.6867
The AUD/USD is trading with a neutral bias at 0.6892 level, holding within a symmetric triangle pattern. The patter is providing resistance around 0.6920 along with support at 0.6820. A bullish breakout of 0.6920 level can extend buying unto 0.6975 marks. On the lower side, the AUD/USD may support the pair at 0.6840 and 0.6800 level. Buy stop can be placed around 0.6925 to capture a quick buy trade today. Good luck!