- PMIs continue to portray improvement in the world’s second-largest economy.
- The recent risk to the US-China trade deal dims optimism surrounding the welcome data.
Despite China’s Caixin services PMI beating market consensus, the AUD/NZD pair trades near 1.0550 during early Monday.
China’s April month services purchasing manager index (PMI) from Caixin rose past 52.8 mark consensus and 54.4 prior to clock in at 54.5.
The latest PMI follows the slew of activity gauges that have flashed welcome numbers for the dragon nation.
The data/news concerning China has a higher impact on Australian Dollar (AUD) linked pairs as it is the world’s largest commodity user and the biggest customer to Australia.
Earlier during the day, markets reacted to the US President Donald Trump’s tweet conveying a threat to Chinese goods with downbeat trading for antipodeans.
After President Trump’s threat to levy additional duties on China’s goods, China’s Vice Premier Liu He canceled this week’s scheduled visit to Washington.
As a result, uncertainties surrounding the US-China trade talks have been renewed and the same challenges commodity-linked currencies.
At the data front, weaker than prior 4.1% (revised) growth of New Zealand’s ANZ commodity price confronted mixed releases for Australia’s private surveys on inflation and employment.
Given the absence of major data on the card, investors may keep observing developments surrounding the US-China trade deal after China’s latest retaliation to the US threat.
Technical Analysis
While the absence of a downturn beneath 1.0540 favors the quote’s uptick to 1.0570, a short-term descending trend-line from April 17 could then question buyers around 1.0590, a break of which could trigger the quote’s rise to 1.0615 and 200-day simple moving average (SMA) level of 1.0670.
On the downside break of 1.0540, 100-day SMA level of 1.0495, followed by 1.0480 figure comprising 50-day SMA, could become sellers’ favorites.
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