3 June 2019 | AtoZ Markets – The Caixin Manufacturing PMI is a composite indicator designed to provide an overview of the activity in the manufacturing sector and acts as a leading indicator for the whole economy. When the PMI is below 50.0 level this indicates that the manufacturing economy is declining, while if the value stands above 50.0 indicates an expansion of the manufacturing economy.
What is Caixin Manufacturing PMI?
The Caixin Manufacturing PMI is concluded from a monthly survey of about 430 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.
A higher than expected reading should be taken as bullish, while a lower than expected reading should be taken as bearish for the currency.
Flash figures are released approximately 6 business days prior to the end of the month. But then, the final figures overwrite the flash figures upon release and are in turn overwritten as the next Flash is available.
Caixin PMI AUDUSD impact
Early Monday at 01:45 GMT, traders can check China’s Caixin Manufacturing Purchasing Managers Index (PMI). The AUDUSD pair is forecasting to hold in at 50.00, a bit lower than the previous record of 50.2.
Most importantly, the major factor behind lower PMI is due to the US-China trade affair and disappointments from China’s official NBS manufacturing PMI, Aussie traders will be extra-cautious of any dovetailing data coming out of China.
AUDUSD Technical outlook
The AUD/USD pair is recovering on the daily candles to the overall weakness of the US Dollar (USD). However, Aussie gains are under pressure from the surrounding trade environment between the US and China. It should also be noted that the sluggish prints of NBS manufacturing PMI already has questioned Aussie buyers and may recall latest lows around 0.6860 with 0.6900 being immediate support if data disappoints.
Meanwhile, an overwhelmingly positive result can help the quote to cross 0.6950 immediate resistance and run up towards 0.7000 and 50-day simple moving average (SMA) level of 0.7025.
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