- Summary:
- AUDUSD is testing a critical support level on the 1-hour timeframe after China's PMI reports showed expanding industry activity. Where is it headed to next?
Yesterday’s FOMC statement sparked dollar weakness and allowed AUDUSD to trade higher. Today, following the PMI reports from China, it can be seen that the currency pair is now testing resistance at the 100 SMA.According to official government data, China’s services PMI for April is at 53.2, higher than the forecast at 52.7. Meanwhile, the manufacturing PMI missed the 51.0 consensus when it printed at 50.8. Markit also released its own manufacturing data with the Caixin manufacturing PMI coming in at 49.4.
Despite mixed figures, the reports help ease investor concerns about economic growth because both readings were above the 50.0 baseline which indicates expansion.
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Where will AUDUSD head to next?
The 1-hour chart could provide more insight. As of this writing, the currency pair is trading at the rising trend line (from connecting the lows of April 23, April 24, April 28, and April 29). A hammer has already formed which suggests that AUDUSD may soon trade higher, even past the 100 SMA on the daily time frame. Should this happen, the next resistance level on AUDUSD could be at 0.6680 where the 200 SMA coincides with the March 9 highs.
On the other hand, a close below today’s Asian session lows at 0.6528 may invalidate support at the rising trend line. It could mean that there are still sellers left in the market who could push AUDUSD to 0.6460 where it cold test the 100 SMA on the 1-hour chart and the highs of April 27.