The recent release of the PMI Manufacturing indices for various countries has shown disappointing results for the United States. The actual Final Manufacturing PMI came in at 51.3, exceeding the expected value of 50.9. Similarly, the ISM Manufacturing PMI was reported at 48.7, lower than the anticipated 49.8. This data has had a negative impact on the US dollar, with the currency weakening as a result. The subpar manufacturing activity figures have fueled speculations of a potential interest rate cut by the Federal Reserve.
Following the release of the manufacturing data, currencies of other countries strengthened against the US dollar. For instance, the AUD/USD exchange rate climbed above 0.669, reaching its highest level in two weeks. However, the US dollar has started to rebound from its recent decline, particularly evident in the AUD/USD chart. This rebound suggests a possible internal weakness in the Australian dollar.
A closer look at the daily chart of AUD/USD reveals several key points. The market has been in a downtrend since late 2023, as indicated by the descending red channel. The price of AUD/USD is currently near the upper boundary of this channel, suggesting a potential reversal. Furthermore, a symmetrical triangle pattern has formed, indicating a temporary balance between supply and demand forces. The key level of 0.665, previously acting as resistance, now serves as the central axis of the triangle. Moreover, the formation of bearish engulfing candles above the 0.668 level indicates ongoing selling pressure.
Outlook and Potential Market Movements
It is possible that bears will attempt to break downwards from the consolidation triangle in June, resuming the prevailing downtrend in the AUD/USD market. The upcoming FOMC meeting scheduled for June 12th could be a significant driver for this scenario. Traders can take advantage of these market movements by trading over 50 forex markets with FXOpen. With low commissions, deep liquidity, and spreads from 0.0 pips, FXOpen provides a platform for efficient forex trading. However, readers should note that the opinions expressed in this article represent the views of FXOpen and should not be considered as financial advice or a solicitation to trade.
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