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AUD/USD remains sidelined around 0.7300 despite downbeat China PMI

  • AUD/USD drops towards intraday low on China data but keeps the immediate trading range.
  • China NBS Manufacturing PMI, Non-Manufacturing PMI lag behind market consensus and prior readings in August.
  • Markets remain lackluster amid mixed clues and cautious mood ahead of US NFP.
  • Virus updates, US data may entertain intraday traders.

AUD/USD sellers attack intraday low surrounding 0.7285 after China data disappointed the pair buyers during early Tuesday. Even so, the quote remains inside a 20-pip choppy range amid mixed clues.

China’s official NBS Manufacturing PMI dropped below 50.2 forecast and 50.4 previous readouts to 50.1, barely missing the contraction region. However, the Non-Manufacturing activities shrunk, per the PMI data, for August while flashing 47.5 figures versus 52.8 expected and 53.3 prior.

Read: Chinese PMIs miss the mark, AUD steady

Although the downbeat data from Australia’s largest customer weigh on the AUD/USD prices, easing covid infections at home seem to defend the bulls. Australia’s most populous state New South Wales (NSW) prints 1,164 daily infections versus the record level of 1290 flashed the previous day. This helps drag the national count to sub 1,300 levels.

In addition to the covid updates, the market’s cautious optimism for the Fed’s monetary policy outlook and upbeat equities also battle the AUD/USD sellers.

That said, the S&P 500 Futures remain firmer around the record top while the US 10-year Treasury yields drop one basis point (bp), down for the third consecutive day, at the latest. Additionally portraying a cautious optimism in the market is the US Dollar Index (DXY) that fails to extend the previous day’s rebound from a two-week low.

Having witnessed an initial market reaction to the China PMI data, AUD/USD traders will keep their eyes on the risk catalysts for fresh impulse. However, nothing more important than Friday’s US jobs report for August. That said, US Chicago PMI, Consumer Confidence and housing figures could offer intraday moves to the pair.

Technical analysis

A bearish spinning top candlestick around a nine-week-old resistance line, near the 0.7300 threshold, challenges AUD/USD bulls. However, sellers are likely to wait for a clear downside break of the 10-DMA level of 0.7240 for fresh entries.

 

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