The AUD/USD has managed to recover from yesterday’s flash crash and has started ticking up on some better than expected Chinese data.

China released its Caixin PMI for December, which came in at 53.9 vs 53.0 expected.

The result is a positive given the weak PMI measures that we had seen earlier in the week which weighed on not only the AUD/USD but the broader market.

Aussie Outlook

The AUD/USD has started to hold the major level at 0.7000 after the huge dump yesterday that saw us fall to 0.6750.

The speculation was that it was a ‘liquidity event’ and there hasn’t been too much more made of it today.

The AUD/USD is holding on, but we do have more resistance overhead at 0.7050. I still expect another test of the 0.7000 level in a meaningful way. US employment will be important as it will be the key driver of the USD headed into the weekend.