AUD/USD probes bears around 0.6350 on upbeat China GDP, US PMIs eyed

• AUD/USD bounces off intraday low after upbeat China Q3 GDP.
• Challenges to sentiment, volatile markets also test buyers.
• Aussie PMIs, RBA’s Kent join fears of downbeat economic growth favor bears.
• US activity data for October will decorate intraday calendar.

AUD/USD picks up bids to pare intraday losses around 0.6365 after China reported upbeat Gross Domestic Product (GDP) data for the third quarter (Q3) during early Monday. However, sour sentiment, volatile markets and pessimism surrounding Australia seems to challenge the Aussie pair buyers.

China’s Q3 GDP rose to 3.9% YoY versus 3.4% expected while September’s Industrial Output also increased by 6.3% on a year compared to 4.5% market forecasts. However, China Retail Sales eased to 2.5% YoY from 3.3% market expectations during September.

Also read: China GDP (YoY) Q3: 3.9% (exp 3.3% vs. prev 0.4%), Aussie remains volatile

It should, however, be noted that Australian government will downgrade growth forecasts in the upcoming budget update joined the hawkish Fed bets and geopolitical fears surrounding China to weigh on the AUD/USD prices of late.

Reuters reported that Australia's economic growth is expected to slow sharply next financial year as rising inflation curbs household consumption, according to new forecasts to be unveiled by Treasurer Jim Chalmers in Tuesday's budget. Elsewhere, the ABC News quoted Ukrainian General Oleksandr Syrskiy citing fears of Nuclear war. Furthermore, looming fears for Chinese chip companies, due to the US-led restrictions, join the fears that China President Xi Jinping won’t hesitate to escalate geopolitical matters with the US when it comes to Taiwan to weigh on AUD/USD prices.

Even so, S&P 500 Futures print 0.50% intraday gains while the US 10-year Treasury yields remain offered around 4.19%, extending Friday’s losses from the 14-year high.

Earlier in the day, 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.

Further, 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.

Looking forward, AUD/USD traders will pay a close attention to the risk catalysts, as well as the preliminary readings for the US PMIs for October. That said, AUD/USD bears are likely to keep the reins amid the recently increasing hawkish Fed bets and geopolitical fears.

Technical analysis

Despite the latest rebound, the AUD/USD pair retreats from a 21-DMA hurdle while paring the first weekly gain in three.