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

A smaller miss of contraction region by China’s January month official Manufacturing PMI pushes the Aussie traders to closely analyze Caixin Manufacturing PMI data, up for publishing at 01:45 GMT on Monday. The private activity gauge of Australia’s largest customer is expected to retrace a bit to 51.3 from 51.5.

While the recent signals and data from Australia have been mixed and failed to offer any key guidelines to the Reserve Bank of Australia (RBA), policymakers will observe catalysts, like this data, to portray the path of rate alterations in 2020. Most analysts expect the RBA to keep its rate cut trajectory while avoiding the immediate moves.

It’s worth mentioning that today’s Chinese data will have larger market repercussions as traders from Beijing will return to their desks for the first time since January 23.

How could it affect the AUD/USD?

Amid the mixed play between the employment and inflation numbers from Australia, investors will take clues from its largest customer to foresee near-term Aussie moves. The RBA is also waiting for more signs to extend its rate cut trajectory while also praising the recent economics. Furthering the importance of data will be the present state of coronavirus outbreak fears that could have magnified impact if the PMI disappoints.

Technically, FXStreet’s Ross J Burland cites the pair’s failure to offer long set-ups and hold the supports while expecting further declines:

“AUD/USD has been in 12-days of consecutive decline, but that does NOT mean there has to be a sustained correction. It wasn't long ago when the price was in a similar momentum, (-5%) and there was a further 1% to the downside in August 2019. However, a bounce would be expected at this juncture. Meanwhile, should a correction not developt towards prior support structures, the downside below 0.6650 opens risk all the way to the 0.63 handle. A 50% mean reversion open the 0.68 handle as an upside target. Narrow trading will likely continue until the RBA meeting is out of the way.”

Key Notes

AUD/USD: Under pressure near 0.6690, multi-week low, with eyes on China open

AUD/USD Forecast: multi-year low about to be challenged

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.