AUD/USD declines after facing barricades around 0.6900, focus shifts to US PMI

• AUD/USD has surrendered the majority of its gains and has slipped to near 0.6886.
• The downbeat Aussie PMI has weakened the aussie bulls.
• A mixed performance is expected by the US PMI.

The AUD/USD pair is falling sharply after failing to cross the immediate hurdle of 0.6900 in the Asian session. It seems that the pullback move by the aussie bulls from Monday’s low of 0.6862 is concluding sooner and a fresh downside impulsive wave will initiate. The asset has picked significant offers after the release of the downbeat Aussie Purchasing Managers Index (PMI) data.

The S&P Global Manufacturing PMI slipped sharply to 54.5 vs. expectations of 57.3 and the prior release of 55.7. While the Services PMI data landed lower to 49.6 against the forecasts of 54 and the former figure of 50.9. The downbeat PMI data has weakened the aussie bulls.

There is no denying the fact that the poor PMI data could be one of the consequences of the rising Official Cash Rate (OCR) by the Reserve Bank of Australia. To contain the galloping inflation, RBA Governor Philip Lowe has elevated its Official Cash Rate (OCR) to 1.85%. This has resulted in an extreme liquidity squeeze in the Australian economy, which has left only costly money in the palms of the corporate sector. And, they are forced to deploy the same in ultra-filtered investments only.

Meanwhile, the US dollar index (DXY) has resumed its upside journey after giving an upside break of the consolidation formed in a narrow range of 108.86-108.96 in the early European session. Going forward, investors are awaiting the release of the US PMI data. As per the market forecasts, the US Manufacturing PMI will land at 51.5 vs. the prior print of 52.2. Contrary to that, the Services PMI will elevate meaningfully to 49.1 from the former figure of 47.3.