AUD/USD remains bid above 0.7350 after China Caixin PMI

The AUD/USD pair remains bid following the release of upbeat China data. The escalating tensions between China and Australia look to be capping gains. 

The data released at 01:45 GMT showed China's Caixin Manufacturing PMI, which surveys the small and medium-sized export-oriented units, rose to 54.9 in November versus expectations for 53.5 following October's 53.6. The data has come a day after government PMIs showed a continued rebound from the world's second-largest economy from the coronavirus-induced slowdown seen earlier this year. 

So far, AUD/USD has failed to extend the early rise from 0.7338 to 0.7360 on the back of strong China data. The upside is being capped, possibly by the China-Australia tussle.

Australian Prime Minister Scott Morrison has demanded an apology for a senior China government official's tweet showing a doctored image of an Australian soldier killing an Afghan child. China has placed tariffs on key Australian exports like wine in response to what it claims are hostile policies from Canberra, according to Axios. 

The currency pair picked up a bid near 0.7338 early today, possibly tracking the uptick in the US stock futures. Domestic data releases have been AUD-supportive as well. 

Australia's Building Permits, or the number of approvals for new construction projects, rose 14.3% year-on-year in October following September's 8.8% jump, the data released early Monday showed. Australia's current account surplus narrowed to AUD 10 billion in the third quarter from AUD 16.3 billion in the second quarter. 

Technical levels