AUD/USD: No response to weaker-than-expected China PMI

AUD/USD holds above 0.70 after a below-forecast China Caixin PMI.
The manufacturing activity expanded at a slower rate in December.
PBOC will lower RRR for commercial banks by 50 basis points from Jan. 6.

Omkar Godbole FXStreet Contributor

AUD/USD is barely moving even though key data released soon before press time showed China's factory activity expanded at a slower rate in December

China's Caixin/Markit manufacturing Purchasing Managers' Index (PMI) for December came in at 51.5, missing the expected print of 51.7 and down from the seven-month high of 51.8 registered in December.

Caixin's PMI surveys small and medium-sized export-oriented units. While the above-50 reading indicates the activity expanded in December, the decline from 51.8 to 51.5 suggests deceleration and is bad news for the Aussie dollar, a proxy for China.

So far, however, the Australian dollar has shown resilience. The AUD/USD pair is currently trading at 0.7015, representing no change on the day, having hit a low of 0.7006 in early Asia.

The People's Bank of China (PBOC) said Wednesday that the required reserve ratio for commercial lenders will be lowered by 50 basis points from Jan. 6, releasing about 800 billion yuan ($115 billion) of liquidity into the financial system.

The central bank's continued action to lower borrowing costs may bode well for the risky assets, putting a bid under the AUD. Technical charts, however, indicate scope for a correction below 0.70.

Technical levels

AUD/USD

Overview
Today last price	0.7016
Today Daily Change	0.0002
Today Daily Change %	0.03
Today daily open	0.7014

Trends
Daily SMA20	0.6904
Daily SMA50	0.6862
Daily SMA100	0.6824
Daily SMA200	0.69

Levels
Previous Daily High	0.7043
Previous Daily Low	0.7004
Previous Weekly High	0.6987
Previous Weekly Low	0.6892
Previous Monthly High	0.7033
Previous Monthly Low	0.6762
Daily Fibonacci 38.2%	0.7019
Daily Fibonacci 61.8%	0.7028
Daily Pivot Point S1	0.6997
Daily Pivot Point S2	0.6981
Daily Pivot Point S3	0.6958
Daily Pivot Point R1	0.7036
Daily Pivot Point R2	0.7059
Daily Pivot Point R3	0.7075

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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