Chinese news continues to dominate the Aussie’s trading. The independent and highly regarded purchasing managers’ index from HSBC and Markit for China’s manufacturing sector surprised with a rise to 50.5 points, better than 50 points expected for the month of August.
AUD/USD managed to ride on this and gradually rise above the 0.89 handle. Is this a real recovery or just a temporary correction?
The survey of around 430 purchasing managers stood on 50.2 points last month. The 50 point mark is the border between growth and contraction. 50.5 isn’t very exciting news, but at least the number didn’t drop below 50.
In the context of Chinese demand, prices of iron ore have been very worrying lately, with a tumble to a 5 year low just above $80 per ton. Australia exports iron and China is certainly a big customer.
0.8910 serves as a pivotal point and the pair is right there. 0.90 is the clear level of resistance above and 0.8820 works as support.
For more, see the AUDUSD forecast.
In our latest episode, we talk about the risk/reward ratio, the FOMC decision and what it means for the dollar and Chinese wobbles: