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AUD/USD dumped, on its way to 0.7100 on poor China PMIs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    The Aussie battering extends into China, with the OZ currency under heavy selling pressure after the Chinese manufacturing sector activity continues to deteriorate, as reflected by both the official and Caixin PMI reports.

    AUD/USD breaches 100-DMA support

    Currently, the AUD/USD pair trades 0.38% lower at 0.7115, hovering close to fresh session lows reached at 0.7109 post-China data. The Aussie met fresh supply following the release of poor set of PMI reports from Australia’s biggest trading partner – China, which refuelled China slowdown fears and its impact on the country’s external demand.

    China Caixin Manufacturing PMI for February came in at 48.00 vs 48.4 expected and 48.4 last. While the official China manufacturing PMI fell from 49.4 in January to 49.0 in Jan, the weakest reading in more than four years.

    Earlier today, the AUD/USD pair remained under pressure on the back of disappointing domestic macro data, while markets remain wary ahead of the RBA cash rate decision due later this session. Australia’s current account deficit expanded in Q4, while the building consents plunged worse than expected, -7.5% actual vs -2.9% expected.

    AUD/USD Levels to watch

    The pair finds the immediate resistance at 0.7138/39 (100-DMA/ 1h 10-SMA) above which gains could be extended to the next hurdle located at 0.7175 (200-DMA). On the flip side, the immediate support located at 0.7100 (psychological levels). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7081/78 (Feb 17 & 16 Low).
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