Insights 
VT 
AUD/USD recovered to over 0.6400 following mixed US PMI data that weakened safe-haven flows into the US Dollar. The S&P Global US Composite PMI decreased slightly; manufacturing remained steady, and services softened but exceeded expectations.
The Australian Dollar (AUD) gained against the US Dollar (USD) after falling to a one-month low due to tensions in the Middle East. AUD/USD was trading at approximately 0.6426, recovering much of its earlier losses.
Us Manufacturing and Services
The S&P Global Composite PMI for the US dropped to 52.8 in June from 53 in May, while manufacturing remained at 52 and the Services PMI declined to 53.1. These mixed readings reduced fresh US Dollar demand, aiding the AUD/USD rebound.
Fed Governor Michelle Bowman’s remarks about steady inflation progress toward the 2% target and potential rate cuts contributed to US Dollar weakness. This allowed the Aussie to gain as the US Dollar Index fell below 99.00, trading around 98.70.
Australia’s private sector showed growth, with services hitting a three-month high, according to S&P Global figures. Technically, AUD/USD remains supported near 0.6400. If it closes above 0.6450, it may approach 0.6500–0.6550, but failure to maintain above 0.6400 could expose it to a drop towards 0.6300.
With the composite PMI in the US easing modestly and key sectors showing diverging momentum, the associated cooling in US Dollar demand was swift. Manufacturing stalled but avoided decline, while services, despite softening, surpassed forecasts. The sharp rebound in AUD/USD reflects how markets latched onto these nuances, interpreting them as a possible hint of softening economic traction in the US.
Domestic Momentum and Market Tension
Given Bowman’s recent comments, we see a shift in expectations for US monetary policy. Her measured tone on inflation and openness to rate cuts unlocked room for Dollar weakness. This, in turn, removed pressure from high-beta currencies like the Australian Dollar, at least temporarily. From this, it becomes evident that interest rate projections remain in play as a market driver, especially when broader demand signals waver like they did this week.
Locally in Australia, positive signals from the private sector, particularly services, have introduced a buffer for downside moves. A three-month high tells us that domestic momentum is still there, even amidst global market tension. This makes it even more important to watch domestic releases alongside external risk events, because they are playing a greater role in short-term price direction than they did in much of the second quarter.
Technically, 0.6400 has held firm. This area continues to act as a near-term anchor point for directional moves. If we see a daily close that moves us convincingly past 0.6450, positioning strategies could begin to shift, targeting the next resistance range near 0.6550. Activity around those levels tends to trigger more mechanical flows that could accelerate price action.
On the downside, any return below 0.6400—especially if accompanied by renewed US Dollar demand or weakening domestic sentiment—would present a clean path toward the lower levels we’ve observed in previous defensive phases, particularly around 0.6300. Moves here tend to attract faster reactions, often driven by short-term participants exiting quickly.
Given how sentiment is tied to policy language, we should keep close attention on Fed communications, particularly anything that changes expectations for timing on cuts. The last few sessions have shown how mild adjustments to outlooks—without major shifts in data—can produce sharp currency responses. That context should not be ignored in structuring directional risk.
