AUD/USD struggles below 0.6400 on downbeat Aussie PMI, RBA’s Kent

• AUD/USD pares recent gains after an upbeat start to the week, renews intraday low of late.
• Aussie PMIs for October came in softer, RBA’s Kent signals further rates increases but size, timing will depend upon data.
• US PMIs, risk catalysts will offer intraday directions, bulls may find it difficult to keep the reins.

AUD/USD takes offers to renew intraday low around 0.6370, after an initial jump to a fortnight high, as the Aussie pair traders witness downbeat catalysts at home to start the trading week.

That said, Australia’s S&P Global Manufacturing PMI eased to 52.8 in October versus 53.5 previous readings and 52.5 market forecast while the Services counterpart dropped to 49 from 50.6 prior and 50.5 forecast. With this, S&P Global Composite PMI slipped into the contraction territory with 49.6 figure versus 50.9 previous readouts.

On the other hand, Reserve Bank of Australia (RBA) Assistant Governor (Economic) Christopher Kent repeats that the RBA board expects to increase interest rates further in the period ahead. The policymaker, however, also stated that the size and timing of rate increases will depend on incoming data, per Reuters.

Hence, mostly downbeat data and return of China’s active days, after a one-week-long annual Communist Party Congress, seemed to have teased the AUD/USD bears after the pair posted the first weekly gain in three.

That said, hopes of witnessing signals for easy rate hikes from the US Federal Reserve starting from December seemed to have triggered the AUD/USD pair buyers the previous day.

On Friday, St. Louis Fed President James Bullard said, “I want rates that put significant downward pressure on inflation.” On the same line, Chicago Fed President Charles Evans stated that they will need to raise rates further and hold them for awhile. However, Nick Timiraos, Chief Economics Correspondent at The Wall Street Journal (WSJ) wrote that the Federal Reserve officials are barreling toward another interest-rate rise of 75 bps at their meeting in November and are likely to debate then whether and how to signal plans to approve a smaller increase in December.

While portraying the risk-on mood, US equities posted the largest weekly gains in four months while the US 10-year Treasury yield marked 5% weekly gain while refreshing 14-year high, despite posting mild losses on Friday.

Technical analysis

A clear upside break of the descending trend line from September 12 and the 21-DMA, respectively around 0.6370 and 0.6280, keeps AUD/USD buyers hopeful to rush refresh the monthly high, currently around 0.6550.