The AUDUSD came under pressure as the HSBC flash manufacturing PMI fell to a seventh-month low from 49.5 to 48.3 in February. This has significant impact on the Aussie dollar because China is Australia’s largest trading partner and relies heavily on commodity demand.
Factory output has continued to slow as China tries to shift from an easy credit economy to more stabilized growth. On the downside, the path to stabilized growth is not as spectacular as market participants thought.
In the weekly analysis, the AUDUSD was targeted to reach .9147 given that resistance at .9070 was taken over. The previous rally in risk assets last week suggested a short-term boost, but it was short-lived as economic data and global geo-political events continue to worry optimists.
Currently trading at .8945, the AUDUSD price action is breaking through the 50 and 20 EMAs and looking to test support at .8920. The ascending trending from the initial move upward could be additional support at .8890.
Price action is likely to see more downside as the +/- DMI is about to have a bearish crossover. A break of the uptrend through .8890 will trend price action lower to .8850.
A pullback to .9000/10 will be the nearest resistance level prior to making another attempt at .9070.