Key Points
- The Aussie dollar declined towards 0.7370 against the US Dollar before starting a correction.
- During the downside move, the AUDUSD pair broke a bullish trend line formed on the hourly chart at 0.7450.
- Today in China, the Caixin China Manufacturing PMI™ was released by Markit Economics.
- There outcome was on better, as it came in at 50.9, more than the forecast of 50.8 in Nov 2016.
AUDUSD Technical Analysis
The Aussie dollar declined recently from the 0.7497 high against the US Dollar, and broke a couple of important support levels. First, a bullish trend line formed on the hourly chart of AUDUSD at 0.7450 was cleared. Second, the 21 hourly simple moving average was broken.
The pair is traded as low as 0.7369 before starting a correction. It traded towards the 38.2% Fib retracement level of the last decline from the 0.7497 high to 0.7339 low where sellers appeared.
The pair again heading lower, and it looks like the current correction wave is over and the pair could retest the last swing low of 0.7369.
Caixin China Manufacturing PMI
Today in China, the Caixin China Manufacturing PMI™, which is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private manufacturing sector companies was released by Markit Economics.
The market was expecting a decline from the last reading of 51.2 to 50.8 in Nov 2016. However, the result was a bit better, as the PMI came in at 50.9. The report added that the PMI “fell from a 27-month high of 51.2 in October, to signal a marginal improvement in overall operating conditions. Nonetheless, the health of the sector has now strengthened in each of the past three months, which marks the longest period of improvement since late-2014“.
Overall, the AUDUSD recovery seems to be over, and the pair may head lower once again towards the 0.7340 level.
