AUD/USD recovers to 0.6915, all eyes on China’s PMI

Lack of fresh trade negative news triggers Aussie’s pullback.
China data will be the key for near-term direction.

Anil Panchal FXStreet

Absence of new threats on the trade front helped the AUD/USD to recover towards 0.6915 during the early Asian session on Friday. However, investors still remain cautious ahead of headline data from its largest customer China.

The Aussie pair, often considered as a global risk barometer, dropped recently as trade tensions between the US and China are escalating.

The same could also be considered as a reason for the recent slump in the US 10-year treasury yields that are near to September 2017 levels near 2.217%.

Adding to the worries for the Australian Dollar (AUD) was domestic housing and private capital expenditure data released on Thursday.

Traders are all set to observe the manufacturing and non-manufacturing purchasing manager index (PMI) numbers from China. Forecasts suggest, manufacturing gauge to slip into the contraction region with 49.9 mark compared to 50.1 earlier. However, non-manufacturing PMI may rise to 54.5 versus 54.3 earlier.

After China’s PMI, Australia’s private sector credit and the US economic calendar will be in the spotlight.

Technical Analysis

Failure to provide a clear downturn under 0.6900 points to the pair’s recovery towards 0.6940 ahead of shifting market focus to 0.7000 and then to 50-day simple moving average (SMA) level near 0.7035.

Should the quote slips beneath 0.6900, 0.6860 and the year 2016 low near 0.6830 could act as intermediate halt during the downturn to 0.6800 round-figure.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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