Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
💰 With a 129% YTD gain in the bag, these are our AI’s top global picks for March
Read now
AUD/USD Lifted By Stronger Chinese Manufacturing Sector
www.investing.com/analysis/aud-usd-%E2%80%93-lifted-by-stronger-chinese-manufacturing-sector-184786
AUD/USD Lifted By Stronger Chinese Manufacturing Sector
By Mingze Wu | Sep 23, 2013 01:00AM ET AUD/USD traded higher on a stronger HSBC Manufacturing PMI (Flash) during early Asian session, with the highest in 6 months print pushing AUD/USD to a high of 0.9438. This makes perfect fundamental sense, as a stronger than expected China manufacturing sector will be expected to import more commodities from Australia, helping to sustain the battered economy. Incidentally, the Australasian Institute of Mining and Metallurgy stated that Mineral Sector unemployment in Australia has grew to 11% vs 2% one year ago. Having more mineral/metals demand from China will be a direct boost to the declining mining sector of Australia and drive AUD/USD higher up in the short-mid term even before considering the bullish impact the positive trade balance will bring.
However, questions remain – does the stronger than expected PMI numbers an indication of longer-term recovery of China and by proxy Australia’s mining sector? Firstly, September’s flash numbers stood at 51.2, which is only really bullish if we consider that PMI numbers have been below the 50 par mark (implying shrinkage) from April to July. August PMI signaled the beginning of the turnaround by coming in at 50.1, barely above the par level. Hence we can regard this latest 51.2 print as a continuation of the recovery narrative, suggesting that China may be getting out of the rut it has been in since the “hard landing” last year.
The problem with this interpretation is that we’ve precedents where such promising signs of recovery turned out to be fluff. We only need to look as far back as early 2013, where China Manufacturing PMI grew to 51.9 in Jan and followed by 51.7 in Mar, only to be followed by the 4 months of shrinkage. This could also be said of early 2011 when the same scenario happened. As such, it will be highly optimistic to think that the slowdown in China has stabilized and a recovery is in play right now. In fact, Chinese officials have been saying that this slowdown in China is expected to last for a few years, and hence what we are seeing now has a high chance of being a mere small cyclical volatility and not a reversal indication.
Hourly Chart
From a technical point of view, it is also important to note that price has failed to overcome the soft resistance of 0.943, indicating that the bearish pressure from post FOMC rally remain in play. Furthermore, it should be noted that bearish pressure were already underway during early Asian session, where price failed to truly clear the 0.939 ceiling in the first few hours of trade prior to the PMI numbers. Currently Stochastic readings continue to point higher, but considering that current levels are close to the flat consolidation “resistance” zone found on 16th Sep, it is possible that Stoch readings will be able to pull lower from here, giving us a confirmation of a bearish move towards Channel Bottom.
Weekly Chart
Prices on the weekly chart is more bullish with a break of the 0.933 consolidation channel ceiling. However, the inability by price to breach the 0.95 level is disconcerting. Stochastic readings on the weekly is similar to the ones of Hourly Chart, where the likelihood of Stoch curve reversing from here is there due to precedents. Furthermore, even if price manage to breach the 0.95 level, it is difficult to imagine a continued bullish action towards parity given that Stochastic readings are close to being Overbought. Hence, long term technical outlook kind of agrees with the fundamental outlook – where price may still look bullish for now but heavy bearish pressures remain.
Original post
Related Articles
Week Ahead – US CPI Set to Ease, BoC to Probably Cut Again
By Trading Point - Mar 07, 2025
As investors attempt to keep up with the daily shift in President Trump’s tariff policies, the February CPI report out of the United States on Wednesday will likely come as a...
USD/JPY: Yen Extends Gains, Markets Eye US Nonfarm Payrolls
By Kenny Fisher - Mar 07, 2025
Japanese yen extends rally for a third consecutive day BoJ’s Uchida says rate hikes still on the table despite tariff concerns US nonfarm payrolls expected to edge slightly The...
EUR/USD Faces Key Test as NFP Looms—Will 1.0800 Hold?
By Andrey Goilov - Mar 07, 2025
EUR/USD is trading near 1.0806 on Friday, maintaining its position despite failing to extend its gains further. Investors’ focus is on February’s upcoming US employment data,...
AUD/USD Lifted By Stronger Chinese Manufacturing Sector
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.