When is China's Caixin Manufacturing PMI and how could it affect the AUD/USD?

China Caixin Manufacturing PMI overview

Having witnessed official readings of China’s Manufacturing Purchasing Managers’ Index (PMI) the previous day, markets brace for Caixin Manufacturing PMI, up for publishing at 01:45 GMT on Thursday, in order to determine near-term trade direction of AUD/USD.

While recently mixed data and a looming question mark over the US-China trade deal keep worrying the Aussie traders, buyers will be extra-cautious of any dovetailing data coming out of China. Macro consensus favors the private activity gauge to follow the official readings’ foot-steps and remain in the contraction region with 49.6 mark versus 49.4 during the month of July.

TD Securities sound a bit upbeat alarm ahead of the release as saying:

We expect the PMI to rise to 50.1 in July from 49.4 in June. The Caixin survey participants consist of mainly small and medium sized companies and this is where much of the targeted lending has been aimed at. Taken together with the likely positive impact of China’s the trade truce with the US, it will likely help to fuel some improvement in the Caixin survey, with a move back into expansion territory following contraction in June.

How could it affect the AUD/USD?

With the AUD/USD pair trading near the key support level of 0.6830, tested twice since June, a disappointing print of PMI can further push the quote towards January low around 0.6680. However, a surprise reading of above 50.00 will shift traders’ attention to oversold levels of 14-day relative strength index (RSI) and can trigger the pair’s pullback towards late-May lows surrounding 0.6860 and then to July 10 bottom close to 0.6910.

Key Notes

AUD/USD: 0.6830 in the spotlight with all eyes on second-tier Aussie data, China’s Caixin PMI

AUD/USD Analysis: nearing critical long-term support

About the China Caixin PMI

The Caixin China Manufacturing PMI™ is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private manufacturing sector companies.