Ella 
AUD/USD rebounded from three-week lows, but struggled to hold onto its latest gains.
Australia’s retail sales rose in the second quarter and its trade surplus narrowed in June.
China’s Caixin services PMI rose unexpectedly to 54.1 in July.
Discussions about the RBA’s policy shift and market caution kept Aussie bears on track.
In early trading on Thursday, AUD/USD set a new intraday high near 0.6560, reflecting the latest economic data from Australia and China. However, AUD/USD lacks a bullish bias amid cautious sentiment ahead of a slew of U.S. data.
Namely, China’s Caixin services PMI jumped to 54.1 in July from 53.9 previously and the consensus estimate of 52.5.
Earlier in the day, the Australian Bureau of Statistics (ABS) released the country’s preliminary June quarter retail sales and trade balance. The data showed that Australia’s retail sales in the second quarter rose slightly from the previous value of -0.6% to -0.5%, and the trade account also narrowed, from the previous 11.791 billion Australian dollars to 11.321 billion Australian dollars, which is expected to be 11.000 billion Australian dollars.
Notably, the U.S. dollar index (DXY) fell modestly to around 102.50, giving bulls a respite at its highest level in three weeks. The recent pullback in the U.S. dollar index may have something to do with its failure to break a descending resistance line from May 31, which was last around 102.75, while the market is also preparing for heavy U.S. data.
Elsewhere, modest gains in S&P 500 futures and a pullback in U.S. 10-year Treasury yields from their highest level since November 2022 also kept the AUD/USD pair at its lowest level in three weeks.
However, it is worth noting that the strong dovishness of the Reserve Bank of Australia and the cautious market sentiment have kept the AUD/USD bears on hold.
Looking ahead, a market consolidation ahead of the release of the US ISM services PMI, factory orders, weekly jobless claims and quarterly readings on non-farm productivity and unit labor costs may allow AUD/USD to hold on to recent gains.
