FxWirePro: AUD/USD extends previous session's weakness, upbeat China Caixin Services PMI fails to impress

Chart - Courtesy Trading View 

AUD/USD is slipping lower for the second consecutive session, upbeat China Caixin Services PMI data failed to provide any support.

IHS Markit has reported China Caixin Manufacturing PMI (Jan) at 52.9, significantly higher than the consensus of 47.3 and the prior release of 48.0.

Also, markets have turned risk-averse amid soaring anxiety ahead of the release of the United States Nonfarm Payrolls (NFP) data, dragging the pair lower.

The US dollar is showing a solid recovery post-fed pullback, ahead of the NFP data which will be a critical component of the US interest rate outlook.

The Reserve Bank of Australia's (RBA) interest rate decision scheduled for Tuesday next week will also be a major catalyst for price action.

The central bank is expected to continue its hawkish stance on interest rates after the surprise jump in the Australian Consumer Price Index (CPI) to 7.8% in Q4.

Technical Analysis:

- AUD/USD was trading 0.27% lower on the day at 0.7057 at around 04:50 GMT

- Price action has slipped below 5-DMA and 200H MA on the hourly charts

- GMMA indicator shows a bearish shift on the intraday charts

- RSI is showing a downward shift from near overbought conditions

Major Support and Resistance Levels:

Major Support Level: 0.6998 (21-EMA), Major Resistance Level: 0.7098 (200H MA) 

Summary: AUD/USD shows signs of minor weakness, dip till 21-EMA likely. Major trend remains bullish. Breach below 21-EMA support could change near-term dynamics.