When is China's Caixin Manufacturing PMI and how could it affect the AUD/USD?

Anil Panchal FXStreet

China Caixin Manufacturing PMI overview

Having witnessed upbeat prints of China’s NBS Manufacturing PMI on Saturday, AUD/USD traders eye October 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 the market reassess the US dollar strength near one month high ahead of the key US presidential election.

Forecasts suggest another above-50 level of 53.0, which in turn could help the RBA policymakers to ask for some more time before jumping on the widely anticipated rate cut on Tuesday. 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 manufacturing PMI will be impacted by less workdays due to the Golden Week holidays (prior: 53, market forecast: 52.8).

How could it affect the AUD/USD?

Although Australia seems to overcome the covid wave 2.0, RBA hasn’t turned down its weapons and has favored a rate cut to 0.10% from the current 0.25%. Further, AUD/USD traders didn’t respect the NBS Manufacturing PMI for October, actual 51.4 versus expected 51.3, which in turn raises fears of the quote’s downside if the private data disappoint. It should, however, be noted that Tuesday’s RBA and Wednesday’s US Presidential election become crucial events for the pair traders to watch as they battle the 0.7000 threshold.

Technically, the pair’s inability to break below the 0.7000 round-figure during September and October teases buyers to jostle with the previous support line stretched from mid-June, currently around 0.7080. Also acting as an upward hurdle is the 100-day EMA level of 0.7062. In a case where the AUD/USD bears conquer the 0.7000 mark, the mid-July low around 0.6920 may gain the market’s attention.

Key Notes

AUD/USD: Kick-starts the key week with 0.7000 in the spotlight

AUD/USD Forecast: Bears to challenge the 0.7000 threshold

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.

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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