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

Following a sustained above 50 print by the official Manufacturing PMI in December, Aussie traders will look towards China’s Caixin Manufacturing PMI to confirm the strength in the key activity area of the largest customer. The private activity gauge, up for publishing at 01:45 GMT on Thursday, is expected to retrace a bit to 51.7 from 51.8 during December.

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.

TD Securities follow market optimism as its report, after the official Manufacturing PMI, said:

Trade prospects strengthened as export orders moved into expansion for the first time since May 18. Sentiment for medium-sized firms moved into expansion for the first time since Aug 18, suggesting upside risks for the Caixin PMI.

How could it affect the AUD/USD?

Given the recent improvement in fundamentals concerning China, be it trade deal with the US or domestic economics, an upbeat reading of the Caixin Manufacturing PMI will be positive for AUD/USD. However, prices will be capped by the holiday mood of traders and the on-doing political tussle between the US and the Middle East.

Technically, tops marked on May 07 and July 04, around 0.7050, become the key upside barrier for the pair that hold the gates for a further rise towards July high of 0.7082. On the downside, short-term sellers can enter below 0.7000 mark.

Key Notes

AUD/USD is respecting a key confluence resistance as trade dominates

AUD/USD Forecast: China keeping Aussie underpinned

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.