The Australian dollar tumbled to one-week lows against its U.S. counterpart on Monday, weighed by the release of downbeat Chinese manufacturing activity data as traders returned to markets after the New Year holiday.
Data earlier showed that China’s Caixin manufacturing purchasing managers’ index fell to 48.2 this month from 48.6 in December, confounding expectations for a rise to 48.9.
The downbeat data added to concerns over slowdown in the world’s second biggest economy.
China is Australia’s biggest export partner.
Intra-day bias stays on the downside with 21 and 55 EMA divergence to the south seen on the 1 hour time-frame, more sell off could be seen in the pair. Also SSRC oscillator shows more selling momentum is still in progress and am expecting further decline to 0.7154 support first. A break of 0.7451 support will bring more fall to 0.7095.
However a break of 0.7204 weekly support 2 might dampen the bearish trend case and bring side way trading in the pair as the pair seems to be oversold already.