The Australian dollar received another reason to rise after the strong inflation numbers in Australia: The flash purchasing managers’ index for the manufacturing sector in China reached 52 points, significantly better than 51 points expected. This independent measure of Australia’s No. 1 trading partner is certainly encouraging.
However, AUD/USD made its way only some 30 pips higher to 0.9470, and dropped back down to the previous range afterwards. It seems to hesitate towards 0.95. Why?
One explanation is that the pair was knocked down from this level not too long ago. After it hit this level and retreated, RBA governor Glenn Stevens gave it another blow and sent it lower.
Another reasons is what happened in New Zealand: while the RBNZ raised the rates for the fourth time, it hinted of a long pause in hikes, intervened verbally to weaken the currency and even hinted at real interventions. There is some correlation between both countries.
In any case, 0.95 is now an even stronger line of resistance. Support is found at 0.9425. For more levels, events and analysis, see the AUD to USD prediction.
