AUD/USD analysis: Chinese manufacturing seen falling into contraction, bad news for AUD
AUD/USD Current price: 0.7074
- Australian and Chinese data disappointed, Chinese Caixin Manufacturing PMI expected to fall into contraction territory.
- AUD/USD unable to take advantage of strong equities' momentum.
The AUD/USD pair continued trading within familiar levels, ending it lower despite the strong momentum of worldwide equities, as the Aussie was weighed by disappointing Australian quarterly inflation data. RBA's Q3 estimate was down to 1.8% YoY, missing expectations of 1.9%, while Q2 inflation was downwardly revised to 1.8% from the previous estimate of 1.9%. Chinese data released at the beginning of the day was also discouraging, as the October NBS Manufacturing PMI was down to 50.2 from the previous 50.8, while the non-manufacturing index came in at 53.9 for the same month, down from the previous 54.9. Both figures were below the market's expectations. This Thursday, Australia will release QE Import and Export prices indexes, alongside with September trade data. China will offer the October Caixin Manufacturing PMI, foreseen at 49.9 from the previous 50.0. A reading indicating China's manufacturing enters in contraction territory, will surely weigh on the AUD.
The AUD/USD pair offers a neutral-to-bearish stance in its 4 hours chart, as its now developing below its 20 and 100 SMA, both lacking directional strength, as technical indicators turn modestly lower still around their midlines. Below 0.7040, the pair has room to test the 0.7000 figure, a tough level to break, moreover considering equities' strength. To the upside, the key is the 0.7120 region as the pair set weekly highs around it for a second consecutive week.
Support levels: 0.7040 0.7000 0.6970
Resistance levels: 0.7090 0.7120 0.7155
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
