China Caixin Manufacturing PMI overview
Having witnessed upbeat prints of China’s NBS Manufacturing PMI the previous week, AUD/USD traders eye July month Caixin Manufacturing PMI from the dragon nation as the immediate catalyst. The activity data from Australia’s largest customer, up for publishing at 01:45 GMT on Monday, also become important as market reassess risks following the latest US dollar pullback from over two-year low.
Forecasts suggest another above-50 level of 51.3 versus the 51.2 prior, which in turn could help the RBA policymakers to ask for some more time before jumping on negative rates, as suggested from their latest communications. However, the coronavirus (COVID-19) woes can keep the bulls in check.
Analysts at Westpac anticipate no change in the private activity gauge while saying, "The Caixin PMI appears to be holding steady in July (prior and market forecast: 51.2)."
How could it affect the AUD/USD?
With the COVID-19 wave 2.0 affecting the Aussie economy, the bears are looking for any strong catalysts to enter and may cheer negative surprises in the data. On the contrary, upbeat prints are less likely to offer any strong run-up to the pair as the market’s risk-tone sentiment dwindles amid mixed catalysts.
Technically, In addition to 10-day EMA near 0.7125, the 0.7065/60 rest-zone, comprising the high of June 10 and July 24, also restricts the pair’s near-term downside. However, bulls are asking for a clear break above 0.7200 to attack 2019 high near 0.7300.
Key Notes
AUD/USD: Coronavirus woes probe bulls near 18-month top above 0.7100
AUD/USD Forecast: Coronavirus developments may hit the Aussie
About the China Caixin PMI
The Caixin China Manufacturing PMI™ is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private manufacturing sector companies.
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