AUD/USD remains anchored despite big jump in AiG Manufacturing PMI

Currently, AUD/USD is trading at 0.7940, down -0.08% on the day, having posted a daily high at 0.7953 and low at 0.7940.

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Despite a massive gain in Australia's AiG Manufacturing PMI for August coming in at 59.8 vs. prior 56.0, up 3.8 points on the month, the Aussie remains anchored ahead of the Tokyo open.

All eyes are on tonight's nonfarm payrolls that could potentially dictate the direction of the greenback until the Fed's meeting in September, beyond any political fallouts in the White House. The debt ceiling could become problematic for example. Any dramatic announcements in respect to Trump's fiscal plans that seemed to have gathered some traction this week would also have a material impact on the greenback. 

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All in all, analysts are expecting a "Goldilocks" type of public job report tonight that should buoy the US dollar going forward, especially in light of the recent GDP numbers for Q2 that was a positive surprise, underlying the FOMC's view point that lackluster inflation is only transitory. August non-farm payrolls are anticipated to rise 180k.

Next for Asia today, however, the Aug Caixin manufacturing as the next potential catalyst. This data comes after the release of yesterday’s official measure which showed a slight move up to 51.7 from a previous 51.4. The data usually has an impact on the Australia dollar. 

AUD/USD 1 day: 

However, analysts at Westpac argue that AUD/USD is likely to remain capped by 0.8000 unless the USD weakens further.

AUD/USD 1-3 month:

Further put the analysts suggested that should the RBA remain firmly on hold, as they expect, and the US dollar rises on tighter Fed policy, then AUD/USD could fall to 0.76 by year end.

AUD/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart shows that the latest advance left the price above a horizontal 20 SMA and the 50% retracement of its July/August decline at 0.7935. "In the same chart," she added, "the Momentum indicator remains below its mid-lines, as the RSI indicator aims modestly higher around 53."

"The pair has a major resistance at 0.7965, where the pair topped mid August and it also has the 61.8% retracement of the mentioned slide, with a break above the level opening doors for an advance up to 0.8000 and beyond, should US employment data to be released early Friday disappoints," Valeria argued.