China Federation of Logistic and Purchasing will release August month’s official PMI numbers around 01:00 GMT on Monday. It should also be noted that Australia’s TD Securities Inflation figures for the current month become an additional catalyst to watch for the AUD/USD pair traders.
Aussie traders will be particularly interested in watching how the largest customer’s key activity numbers defend recoveries that have been questioned off-late. Additionally, any more negatives in the domestic data increase worries of the AUD/USD bulls near a multi-week high.
Market consensus signals the headline NBS Manufacturing PMI to print the first contraction in activities in the previous six months with 48.7 figures compared to 51.1 prior. Further, Non-Manufacturing PMI may recede from 54.2 to 52.1. Talking about the TD Securities Inflation, YoY figures grew 1.3% while MoM data marked 0.9% prints for the previous month.
Ahead of the data, Westpac said:
China’s official August PMIs are due at 11:00 am Sydney/9:00 am local. The manufacturing and non-manufacturing PMIs are both comfortably above the 50 expansion/ contraction threshold, signaling robust growth is continuing. The consensus is 51.1 for manufacturing and 54.2 for services.
How could they affect AUD/USD?
With the AUD/USD pair currently trading near the highest levels in 20-months, around 0.7360 by the press time of early-Asian session trading on Friday, bulls should remain cautious if the data disappoints. An additional reason for the pair traders to remain a skeptic of the latest rise is the coronavirus (COVID-19) resurgence, downbeat Aussie data as well as chatters of negative rates. On the contrary, any upbeat signals of the heading PMIs will be enough for the bulls to attack the late-2018 top around 0.7450/55.
Technically, with the RSI flashing overbought signals, an ascending trend line from March 2020 and December 2018 top near 0.7400 become the key resistance to watch for the bulls ahead of targeting July 2018 peak surrounding 0.7485. Alternatively, the pair’s declines below the previous year’s high of 0.7296 will highlight August 19 peak near 0.7275 as support.
Key Notes
AUD/USD bulls keep 0.7400 on radars with eyes on China PMIs
AUD/USD Forecast: Bulls in charge, 0.7500 at sight
About the China NBS Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI) released by the China Federation of Logistics and Purchasing (CFLP) studies business conditions in the Chinese manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction. As the Chinese economy has an influence on the global economy, this economic indicator would have an impact on the Forex market.
About the China Non-Manufacturing PMI
The official non-manufacturing PMI, released by the China Federation of Logistics and Purchasing (CFLP), is based on a survey of about 1,200 companies covering 27 industries including construction, transport and telecommunications. It's the level of a diffusion index based on surveyed purchasing managers in the services industry and if it's above 50.0 indicates industry expansion, below indicates contraction.
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