AUD/USD holds above 0.76 handle despite weak China services PMI release

AUD/USD remains mildly bid above 0.76 handle even though the China Caixin services PMI missed estimates.

The pace of expansion in the service sector cooled to 51.6 in June from 52.8 in May. Markets were expecting a slight uptick to 52.9. At 51.1 in June, the Composite Output Index fell from 51.5 in May to signal the slowest rate of expansion in a year.

Though the Aussie remains bid, the gains are being capped around the 10-DMA level of 0.7615 levels. Moreover, the AUD bulls were left demoralized yesterday after the RBA refused to join the hawks and retained its neutral stance.

The focus today is in the FOMC minutes, which are expected to defend Yellen’s hawkish June rate hike and shed more light on the next move in the interest rates and the balance sheet normalization process.

AUD/USD Technicals

The daily chart shows a downside break of the rising wedge pattern on Thursday. An end of the day close above 0.7624 (resistance offered by the trend line sloping upwards from June 2 low and June 23 low) would open doors for a revisit to 0.7648 (10-DMA) and 0.77 levels.

On the downside, failure to hold above the previous day’s low of 0.7591 would open doors for a sell-off to 0.7553 (100-DMA) and 0.7533 (200-DMA).