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  • Disappointing PMI data from China weigh  on the AUD.
  • US Dollar Index extends slide to 97.50 area.
  • Coming up in the NA session: ISM-Chicago PMI and CB Consumer Confidence Index.

Despite the fact that the selling pressure surrounding the greenback intensified in the early NA session, the AUD/USD pair struggled to gain traction and was last seen trading at 0.7044, losing 0.18% on a daily basis as the AUD continues to feel the weight of the disappointing Chinese data.  

Earlier today, the data from China showed that the business activity in the manufacturing sector expanded at a very soft pace with the Caixing Manufacturing PMI coming in at 50.2 in April and falling short of the market expectation of 51. Similarly, the NBS’ Manufacturing PMI edged down to 50.1 in the same period from 50.5.

Assessing the data,  “In general, China’s economy showed good resilience in April, yet it stabilized on a weak foundation and is not coming to an upward turning point,”  Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said. “As pressure on the economy  remains in the second quarter, we expect that there will be
minor adjustments to the policy but not a turnaround.”

On the other hand, the greenback continues to weaken against its major rivals with the US Dollar Index slumping to mid-97s before the FOMC announces its monetary policy decisions on Wednesday, allowing the pair to limit its losses for the time being.

Later in the session, the Conference Board’s Consumer Confidence Index and pending home sales from the U.S. will be looked upon for fresh impetus.

Technical levels to watch for