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AUD/USD Rises to 0.65114 Amid Chinese Caixin Manufacturing PMI Release

During the Asian session on Friday, the AUD/USD pair showed a modest increase, trading up by 0.21% at 0.65114. Friday’s market attention gravitated towards China’s economic performance, with the release of February’s private sector PMIs highlighting the country’s economic dynamics.

AUD/USD Price Chart - Source: Tradingview

Chinese Economic Indicators

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The National Bureau of Statistics (NBS) reported a slight decrease in the manufacturing PMI to 49.1 from 49.2, alongside an uplift in the non-manufacturing PMI to 51.4 from 50.7, against the economists’ expectations of 49.1 and 50.8, respectively.

Nonetheless, the Caixin Manufacturing PMI, which often garners more attention, indicated a modest increase to 50.9 from 50.8, surpassing the anticipated decline to 50.6.
This data paints a nuanced picture of China’s manufacturing sector, with production reaching its highest rate since May 2023, a resurgence in new export orders for a second consecutive month, and a strategic increase in purchasing activities by firms in light of improved demand.

Operational Dynamics and Cost Management

Despite a reduction in workforce numbers, unfinished business volumes saw a decline. Notably, the pace of cost inflation decelerated, marking the slowest rise in input prices in seven months, prompting firms to lower selling prices to attract new business for the second month in a row.
This strategy, coupled with the uptick in new overseas orders, could mitigate deflationary pressures, drawing market focus towards Beijing’s forthcoming economic forecast and policy discussions in anticipation of a fiscal stimulus to invigorate the Chinese economy.

Australian Economic Data and Future Outlook

On the domestic front, Australia witnessed a 1.6% rise in retail sales month-over-month, surpassing the previous -2.1% downturn. Private capital expenditure grew by 0.8% quarter-over-quarter, exceeding expectations and prior figures, while private sector credit maintained a steady increase of 0.4% month-over-month.

Anticipated US Economic Releases

The global market’s focus now shifts to upcoming U.S. data releases, including the ISM Manufacturing PMI, expected at 49.5, and the Revised University of Michigan Consumer Sentiment, pegged at 79.6.
Additionally, the ISM manufacturing prices are forecast to slightly decrease to 52.9 from 53.5, potentially impacting the AUD/USD trading landscape with these critical economic insights.

AUD/USD Price Forecast: Technical Outlook

The AUD/USD pair’s pivot point for the currency pair is set at 0.6526, with immediate resistance levels observed at 0.6558, 0.6583, and 0.6609. Support levels form at 0.6490, 0.6470, and 0.6443, providing a cushion against potential downward movements.
  • Overall Trend: Bearish below 0.6527, suggesting a cautious stance for traders.
  • Key Support Level: 0.6490, acting as the immediate floor for the pair.
  • Critical Resistance: 0.6558, marking the first barrier in a potential upward trajectory.

Gold Price Chart

The Relative Strength Index (RSI) stands at 46, indicating neutral market momentum. However, the 50-day Exponential Moving Average (EMA) positioning at 0.6527 suggests a potential pivot towards a selling trend if the pair falls below this mark.
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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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