The Caixin flash manufacturing purchasing managers’ indicator for September disappointing with a drop to 47 points, a new cycle low (since March 2009, a 78 month low), under the 47.6 points expected and also ticking under 47.3 seen in August.
AUD/USD reacted with an immediate fall from 0.7080 to 0.7030 extending previous falls. It then found support at 0.7020 but the bounce was minimal.
Chinese data remains the biggest driver of the Australian dollar, and this data has a bigger impact when it comes from an independent institution. The indicator from Caixin, formerly HSBC is also a forward looking one: it relates to future expectations as well.
However, while the head of Caixin Insight Group say that the decline indicates a crucial stage, he also sees the fundamentals are good and that patience is needed.
Markets aren’t that patient though. The reverberations are not limited to the A$: also the Asian stock exchanges are feeling the heat.
More:Â AUD/USD extends V-shaped recovery on Fed decision but runs out of steam
The clear support line is the very round level of 0.70. 0.7060 now switches to resistance, and its followed by 0.71 and 0.7160.
