Weak China PMI puts brakes on AUD/USD rally

The rally in the AUD/USD pair stalled after the China April Caixin PMI missed estimates. The pair backed off from the high of 0.7548 to 0.7538 levels.

Caixin PMI came-in at 50.3, missing the estimate of 51.2. Last month’s print was 51.7. The details revealed slower increases in output and new orders and a drop in the employment at the fastest pace since the start of the year.

Eyes RBA decision

The Reserve Bank of Australia (RBA) is widely seen keeping rates steady. The focus is on the language, which might tilt to the dovish side given the softness in the labor market, price pressure and more importantly due to housing market concerns.

AUD/USD Technical Levels

The falling channel ceiling on the daily chart is seen offering resistance at 0.7560, which, if breached would open doors for 0.7589 (50-DMA). A violation there would expose Apr 17 high of 0.7610.

On the downside, failure to hold above 100-DMA level of 0.7531 could open up downside towards 0.75 (zero levels) and 0.7470 (Apr low).