China manufacturing PMI hits 5-year high, but fails to lift AUD/USD

China manufacturing PMI rose to the highest level since April 2012, but had little material impact on the AUD/USD pair, which was last seen trading around 0.7640 levels.

Stuck between 5-DMA & 10-DMA

The spot has been restricted to a narrow range defined by the 5-DMA and 10-DMA seen at 0.7640 and 0.7654 this Friday morning.

The official China manufacturing PMI for March came-in at 51.8, beating the expected figure of 51.7. The actual figure was the highest since April 2012. Meanwhile, the non-manufacturing PMI jumped to 55.1 in March from the previous month’s print of 54.2.

The dull reaction in the Aussie dollar, a proxy for China, could be due to the broad based strength in the US dollar.

China economic activity to weaken in the near future

Speculation is on the rise that the economic activity is set to weaken in the near future, courtesy of the PBOC’s decision to drain liquidity over the last five days. This may have kept the Aussie under pressure.

AUD/USD Technical Levels

A break below 0.7631 (50-DMA) would expose 0.76 (zero figure), under which the spot may test 0.7551 (200-DMA). The rising trend line drawn from Dec 29 low and Mar 9 low also offers support around 0.7604.

On the higher side, a break above 0.7654 could yield a re-test of 0.7679 (previous session’s high). A violation there would open up upside towards 0.7749 (Mar 21 high).