• AUD/USD consolidates following the previous day’s bounce amid mixed fundamental cues.
• Hawkish RBA expectations underpin the Aussie, while rising Fed hike bets support the USD.
• Spot prices move little following the release of Aussie trade data and China’s Services PMI.

The AUD/USD pair struggles to capitalize on the previous day's bounce from the 0.7120 region, or a nearly two-week low, and oscillates in a range during the Asian session on Thursday. Spot prices hold steady above mid-0.7100s following the release of Australian trade data and China's RatingDog Services PMI.

A report published by the Bureau of Statistics revealed that Australia recorded a trade surplus of A$1,923M in July, compared to the previous month's revised A$2,341M and consensus estimates of A$1,390M. Adding to this, China's RatingDog Services PMI climbed to 51.4 in August from 50.4 in July, beating market expectations of 50.6. The data, however, does little to provide any impetus to the AUD/USD pair.

However, the strengthening case for the Reserve Bank of Australia (RBA) to consider policy tightening supports the Aussie. In fact, bets for a Reserve Bank of Australia (RBA) rate hike have risen significantly following hotter-than-expected July inflation data and the better-than-expected second-quarter Gross Domestic Product (GDP). This has been a key factor behind the Australian Dollar's (AUD) relative outperformance.

Meanwhile, rising bets for an interest rate hike by the US Federal Reserve (Fed) at its policy meeting later this month, along with escalating US-Iran tensions, help the safe-haven US Dollar (USD) stall the previous day's weak US ADP-led slide. This, in turn, acts as a headwind for the AUD/USD pair as traders now look to the US ISM Services PMI, due later today, ahead of the US Nonfarm Payrolls (NFP) report on Friday.

AUD/USD 4-hour chart

Technical Analysis

The AUD/USD holds above the 100-period Simple Moving Average (SMA) pivotal support on the 4-hour chart, which keeps the near-term bias mildly bullish. As long as spot prices defend this support zone at 0.7130 on pullbacks, the technical structure favors further consolidation to the upside.

A convincing break below, however, might prompt some technical selling and pave the way for an extension of the recent corrective pullback from a multi-month top, touched in August. On the upside, a sustained move and acceptance above 0.7200 is needed to back the case for any further appreciating move.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator

RatingDog Services PMI

The RatingDog Services Purchasing Managers Index (PMI), released on a monthly basis by Caixin Insight Group and S&P Global, is a leading indicator gauging business activity in China’s services sector. The data is derived from surveys of senior executives at both private-sector and state-owned companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for CNY.

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.