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Early on Monday, China Federation of Logistic and Purchasing will release September month’s official Purchasing Managers’ Index (PMI) numbers around 11 am Sydney/01 am GMT. The same will be followed by the Caixin Manufacturing PMI, up for publishing at 01:45 GMT. Considering the high importance that both the catalysts carry for the AUD/USD pair, traders will be keenly observant of the outcome for fresh Aussie moves.

Expectations favor a mild improvement in the Chinese data with the NBS Manufacturing PMI likely inching up from 49.5 to 49.7 while Non-Manufacturing PMI is expected to rise from 53.8 to 54.2. However, the Caixin Manufacturing PMI might keep sellers on the deck with forecasts favoring 50.2 level versus 50.4 prior.

Westpac follows the suit as its latest report says:

“China’s official Sep manufacturing PMI is due at 11am Syd/9am local. Consensus is 49.6, barely changed from Aug. The non-manufacturing PMI is released at the same time, seen at 53.9, also little changed, while the unofficial (Markit, sponsored by Caixin) manufacturing PMI is due 45 minutes later. Consensus is 50.2. These are being jammed out before the 7 day holiday starts tomorrow.”

How could they affect AUD/USD?

Given the nearness to the Reserve Bank of Australia’s (RBA) monetary policy meeting, up for Tuesday, investors will look for any signs of improvement in the key activity numbers from the largest customer China. The same could also push the RBA policymakers to rethink on their dovish bias. However, uncertainty surrounding the US-China trade deal and the overall US Dollar (USD) could keep exerting downside pressure on the Aussie pair.

Technically, 50-day exponential moving average (EMA) and early-August highs, surrounding 0.6820, act as near-term key resistance for the pair, a break of which could accelerate the recovery to monthly top of 0.6895. On the downside, 0.6740/35, 0.6700 and recent low nearing 0.6675 could keep pleasing sellers ahead of challenging 0.6550/60 support-zone comprising multiple tops marked during late-February 2009.

Key Notes

AUD/USD holds on to recovery gains as traders await China’s PMI to predict RBA moves

AUD/USD Analysis: yearly low at 0.6676 exposed

About the China NBS Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI) released by the  China Federation of Logistics and Purchasing (CFLP)  studies business conditions in the Chinese manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market.

About the China Non-Manufacturing PMI

The official non-manufacturing PMI, released by  China Federation of Logistics and Purchasing (CFLP), is based on a survey of about 1,200 companies covering 27 industries including construction, transport and telecommunications. It’s the level of a diffusion index based on surveyed purchasing managers in the services industry and if it’s above 50.0 indicates industry expansion, below indicates contraction.

About the China Caixin Manufacturing PMI

The Caixin China Manufacturing PMIâ„¢, released by  Markit Economics, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private manufacturing sector companies.