The Australian dollar is showing limited movement in the Friday session. In North American trade, AUD/USD is trading at 0.7039, up 0.19% on the day.
Will China PMIs accelerate?
The week wraps up with key data out of China, with the release of Manufacturing and Services PMIs for October. With China looking at Covid-19 out of a rearview mirror, economic conditions continue to improve in the world’s second-largest economy. The services sector has looked strong, as Services PMI has posted readings well into expansionary territory, above the 50-level. In September, the PMI improved to 55.9, up from 55.2 points. This marked the highest reading since 2013. The upward trend is expected to continue, as the consensus for October stands at 56.2 points.
The manufacturing sector has not been as robust as services, with PMI readings pointing to stagnation, with readings barely above the 50-level. The index came in at 51.5, up from 51.0 beforehand. The estimate for October is 51.4 points. These PMI releases could affect the movement of AUD/USD, which is down 1.3% this week. The Aussie is sensitive to key Chinese numbers, as China is Australia’s largest trade partner.
China to unveil 5-year plan
There is no arguing that the mammoth Chinese economy has adapted quite well to the 21st century. At the same time, China’s policymakers continue to prepare 5-year economic plans, which has been a staple of the country’s centralized economic system since 1953. The government released a statement on Thursday about the 2021-2025 plan, but did not release details. The statement discussed generating strong economic growth, but the actual plan will not be released until the National People’s Congress in March 2021.
- There is weak resistance at 0.7068, followed by a resistance line is 0.7109
- We find support at 0.6994. Below, there is support at 0.6961
- AUD/USD broke below the 10-day MA in mid-week, a sign of a downward trend
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