AUD/USD is trading in a downtrend channel since the middle of February. Downtrend resistance is more significant and it was also formed earlier.
Two Chinese PMIs have kept the downside pressure on the pair, but so far it escaped the really critical support line.
The break below 1.0350 was significant, but the Aussie still put up a fight afterwards and managed to temporarily reconquer this line. However, we can see a series of lower highs and eventually lower lows.
The lowest point thus far has been 1.0182, still a safe distance from the 1.0150 line. 1.0150 is the bottom border of the wide 1.0150 to 1.06 range which accompanies the pair since July 2012. AUD/USD is currently at 1.0225, below the 1.0236 line, which is minor.
The Aussie has suffered as a “risk” currency, as fear about the comeback of the debt crisis hit the pair after the indecisive Italian elections. Yet also issues closer to home hit the A$.
The unofficial HSBC / Markit PMI for the Chinese manufacturing sector disappointed early in the week by falling from 52.3 to 50.4, much worse than 52.2 that was expected. The number reflects very slow growth. This was confirmed now.
In addition, also the official figure from the Chinese authorities disappointed by dropping from 50.4 to 50.1 points. The level of 50 separates growth from contraction, and according to the number, China is hardly growing.
China is Australia’s No. 1 trade partner. The Aussie lost ground despite Chinese strength seen towards the end of 2012 and also early in this year. Without Chinese support, will the Aussie challenge the 1.0150 support line?
For more lines and events, see the AUD/USD forecast.