Forex: AUD/USD sliding after China PMI; 1.0450/55 eyed

Share | (Barcelona) - China's NBS Manufacturing PMI for July came in slightly below expectations at 50.1 vs 50.5. The number is the lowest YTD, with a 3rd straight month of slight declines, but nonetheless it remains above the all important 50 level.

AUD/USD has reacted to the downside on the release, recording a new session low at 1.0470 before attempting a timid bounce. The moves to follow post release are expected to be marginal as the data does not really diverge from market views. Besides, at 2.30GMT we get the HSBC China PMI and later on the day is the time for the Fed, suggesting many investors will sit on the sidelines until getting a clearer picture.

Watching at the key levels for Asia, the pair has now broken recent session lows and appears to be heading toward next troubling area a 1.0455/50, where bids are expected to emerge. Below, the next line of support can be found at 1.0435/30, July 19 highs. John Noonan, head of IFR Markets notes "stops below 1.0440." On the upside, regaining the 1.05 is the mission ahead for Aussie bulls.

In a side note, which is likely to get some pro-AUD dip buyers excited, the WSJ Asian edition reports "officials within the foreign-exchange arm of China's central bank recently met with Australian regional governments to discuss buying their bonds, people familiar with the matter said."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Forex and Currencies

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