China just printed its set of PMI figures from HSBC and the government in today’s Asian session, and both reports showed weaker performance in its manufacturing sector. The government figure fell from 50.8 to 50.1 while the HSBC final reading was revised down from 48.3 to 48.2. Weak manufacturing in China could mean weak demand for Australia’s exports.
AUD/USD managed to bounce after the release of these figures, as the actual readings weren’t way below expectations. However, moving forward, it still hints at poorer export industry performance.
There could be a retracement to the .9200 major psychological level for the day, before dollar demand is renewed during the US session. That’s close to the 38.2% Fibonacci retracement level, which has acted as support in the past.
Stochastic is still climbing from the oversold area, suggesting that Aussie bulls are still in control for now. However, once the oscillator turns from the overbought region, the pair could resume its selloff.
By Kate Curtis from Trader’s Way