Australian Dollar rises after upbeat PMIs improve sentiment

• AUD/USD climbs after softer US labor data, reinforcing expectations that the Fed may have less room to maintain restrictive policy.
• Australian activity improved, with the S&P Global Composite PMI rising to 50.4 and the Services PMI increasing to 50.5, both moving back into expansion territory.
• China’s RatingDog Services PMI held firm at 54.1, slightly below the previous 54.4 but still supportive for AUD sentiment due to Australia’s strong trade links with China.

The AUD/USD pair climbs near the 0.6940 level on Friday as the US Dollar (USD) remains under pressure following softer-than-expected United States (US) labor market data released on Thursday. The Australian Dollar (AUD) found additional support from stronger Australian Purchasing Managers Index (PMI) figures, which pointed to a mild improvement in domestic business activity.

The US Dollar extended its decline after the latest US employment figures signaled cooling in the labor market. Softer job creation reinforced expectations that the Federal Reserve (Fed) may have less room to keep policy restrictive for longer, weighing on Treasury yields and reducing demand for the Greenback.

In Australia, the S&P Global Composite PMI rose to 50.4 in June, up from 49.8, moving back above the 50 expansion threshold. The Services PMI also improved to 50.5, compared with 49.9 previously, suggesting that service-sector activity returned to modest growth.

The China RatingDog Services PMI came in at 54.1 in June, slightly below the previous 54.4 reading but still firmly in expansion territory. Since Australia’s export outlook is closely tied to Chinese demand, resilient Chinese services activity may help support sentiment around the Aussie.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6938. The pair is attempting to stabilize after a modest rebound but remains capped beneath the 100-period Simple Moving Average (SMA) near 0.6967, keeping the broader tone mildly negative despite improving momentum. The 20-period SMA around 0.6910 now runs below price, suggesting nearby dynamic support, while the Relative Strength Index (RSI) at about 60 hints at a recovery in buying pressure that has yet to decisively overcome the overhead supply.

On the topside, initial resistance is aligned with the recent horizontal cap at 0.6945, ahead of the 100-period SMA at 0.6967, which forms a more substantial barrier and would need to be reclaimed to ease the current cap. On the downside, immediate support is seen at 0.6931, with further cushions clustered at 0.6922 and 0.6912 before the 20-period SMA at 0.6910, a break of which would expose a deeper pullback toward the recent range base.

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