The AUD/USD currency pair on Friday pulled back off 0.7508 to trade at about 0.7455, after the preliminary US Markit PMIs. The currency pair continues to trade within a descending channel formation in the 60-min chart.

The pair dropped significantly to trade below the 100-hour moving average. However, Friday’s late recovery prevented it from descending to the oversold conditions of the 14-hour RSI.

AUD/USD Fundamentals Overview

From a fundamental perspective, the AUD/USD currency pair is trading at the back of a relatively busy period in the US market. On Friday, the preliminary US Markit Manufacturing PMI for October missed the expectation of 60.3 with 59.2. On the other hand, the Services PMI for the period outshone 55.1 with 58.2, while the PMI Composite beat 54.7 with 57.3. The monthly budget statement for September failed to match the estimate of -$60 billion with -$62 billion. On Thursday, both the initial and continuing jobless claims outperformed expectations.

In Australia, the preliminary Commonwealth Bank Manufacturing PMI for October missed the expectation of 58.6 with 57.3 on Thursday. On the other hand, the services PMI outperformed the estimate of 51.1 with 52, while the PMI composite improved to 52.2 from 46.5. Earlier in the week, National Australia Bank’s Business Confidence for Q3 missed the (QoQ) estimate of 5 with -1.

AUD/USD Technical Analysis (the 60-min Chart)

Technically, the AUD/USD currency pair seems to be trading within a highly volatile descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment. 

Therefore, the bulls will be looking to extend Friday’s late rebound towards 0.7487 or higher to 0.7508. On the other hand, the bears will target short-term profits at about 0.7455 or lower at 0.7435.

AUD/USD Technical Analysis (the Daily Chart)

In the daily chart, the AUD/USD currency pair seems to be trading within an ascending channel formation. The pair recently rallied to the overbought conditions of the 14-day RSI. This indicates a significant long-term bullish bias in the market sentiment.

Therefore, the bulls will be looking to ride the current rally towards 0.7542 or higher to 0.7616. On the other hand, the bears will target potential pullbacks at about 0.7401 or lower at 0.7324.