Chinese Caixin Manufacturing PMI (Purchasing Managers’ Index) is based on a survey of purchasing managers in the manufacturing sector. Respondents are surveyed for their view of the economy and business conditions in China. A reading which is higher than the market forecast is bullish for the Australian dollar.
Here are all the details, and 5 possible outcomes for AUD/USD.
Published on Wednesday at 1:45 GMT.
Indicator Background
Traders should pay close attention to this key release, as China is Australia’s number one trading partner, and an unexpected reading can quickly affect the direction of AUD/USD.
Chinese Caixin Manufacturing PMI continues to hover slightly above the 50-point level, pointing to stagnation in the manufacturing sector. The indicator dipped to 51.0 points in January, short of the estimate of 51.8 points. The forecast for the February report is 50.9 points.
Sentiments and levels
AUD/USD managed to reverse directions and post gains last week. However, the Aussie will likely remain under pressure, with the Federal Reserve expected to raise rates in December. So, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels, from top to bottom: 0.7938, 0.7835, 0.7691, 0.7513, 0.7427 and 0.7311
5 Scenarios
- Within expectations: 48.0 to 54.0: In such a case, AUD/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 54.1 to 58.0: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 58.0: Given the current trend, the likelihood of a sharp expansion is low. Such an outcome would likely push the pair upwards, and a second resistance line might be broken as a result.
- Below expectations: 44.0 to 47.9: A sharper decrease than forecast could push AUD/USD downwards and break one level of support.
- Well below expectations: Below 44.0: A very poor reading could push the pair below a second support level.
For more on the Australian dollar, see the AUD/USDAUD/USD.