Forex Market: AUD/USD trading outlook for June 27th

Friday’s trade saw AUD/USD within the range of 0.7307-0.7650. The pair closed at 0.7470, tumbling 1.93% compared to Thursdays close. It has been the 8th drop in the past 23 trading days and also the sharpest one since May 3rd, when the pair fell 2.37%. The daily low has been the lowest level since June 16th, when a low of 0.7283 was registered. In weekly terms, AUD/USD added 0.96% to its value during the current week. It has been the 13th gain in the past 25 weeks and also a fourth consecutive one. The major pair has gone up 3.28% so far during the current month, following a 4.87% slump in May.

On Monday (June 27th) AUD/USD trading may be influenced by the following macroeconomic report listed below.

Fundamentals

United States

Services PMI by Markit – preliminary reading

Activity in the US sector of services probably increased at a faster rate in June from a month ago, with the corresponding preliminary Purchasing Managers Index coming in at a reading of 55.5, according to a projection by Trading Economics. In May the services PMI was reported at a final 51.3, improving from a preliminary reading of 51.2. According to Markit, in May new business growth slowed, backlogs of work dropped, while payrolls grew at the lowest rate since January 2015.

The PMI is based on data collected from a representative panel of more than 400 private sector companies, which encompasses industries such as transport and communication, financial intermediaries, business and personal services, computing & IT and hotels & restaurants. Values above the key level of 50.0 indicate predominant optimism (expansion in general activity). In case a faster than-expected expansion in services sector activity is reported, this would have a moderate bullish effect on the US dollar, as services contribute to a considerable portion of the US GDP. The preliminary reading by Markit Economics is due out at 13:45 GMT on Monday.

Correlation with other Majors

Taking into account the business week ended on June 24th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/USD to NZD/USD (0.9919, or very strong)
AUD/USD to USD/JPY (0.6981, or strong)
AUD/USD to EUR/USD (0.6420, or strong)
AUD/USD to GBP/USD (0.4059, or moderate)
AUD/USD to USD/CAD (-0.3956, or moderate)
AUD/USD to USD/CHF (-0.5030, or strong)

1. During the examined period AUD/USD moved strongly in one and the same direction with EUR/USD and USD/JPY, while moving strongly in the opposite direction compared to USD/CHF.

2. AUD/USD moved to a moderate extent in one and the same direction with GBP/USD during the week, while moving to a moderate extent in the opposite direction compared to USD/CAD.

3. AUD/USD moved almost equally in one and the same direction with NZD/USD during the period in question. The correlation between the two majors was almost perfect.

Daily, Weekly and Monthly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7476
R1 – 0.7644
R2 – 0.7819
R3 – 0.7987

S1 – 0.7301
S2 – 0.7133
S3 – 0.6958

By using the traditional method of calculation again, the weekly pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7476
R1 – 0.7644
R2 – 0.7819
R3 – 0.7987

S1 – 0.7301
S2 – 0.7133
S3 – 0.6958

In monthly terms, for AUD/USD we have the following pivots:

Central Pivot Point – 0.7366
R1 – 0.7590
R2 – 0.7947
R3 – 0.8171

S1 – 0.7009
S2 – 0.6785
S3 – 0.6428