AUD/USD keeps losses after weak China PMI data

• The soft tone in the AUD/USD is intact as the news out of China offered no positive surprise
• Bearish bias in the options market and bond markets

Currently, AUD/USD is trading at 0.7677; having clocked a high of 0.7699 and a low of 0.7676 earlier today.

The Aussie dollar, widely considered as a proxy for China data, remains weak this Tuesday following a rejection at the 200-DMA hurdle of 0.7694.

China PMI missed estimates

China October official manufacturing PMi printed at 51.6, missing the estimate of 52.00 and down from the previous month's print of 52.4. Reuters report says, " Weakening property market and tighter pollution rules that are forcing many steels mills, smelters and factories to curtail production over the winter.

The official index focuses more on the SOE's (State Owned Enterprises), which have a relatively easy access to credit as compared to the small and medium size export (SMEs) units. The Caixin PMI due later this week focuses more on the SOE's

Looking ahead - The focus will be on the treasury yields and the yield differential (currently stands at 16-week low).

AUD/USD Technical Levels

Jim Langlands from FX Charts says, " With both the 1 & 4 hour charts still looking positive, a run back to 0.7700 would not surprise, above which, a run back to 0.7740 could be on the cards although I don’t really see. it but would sell into it if we were to do so. The direction today will come via the Home Sales/Private Sector Credit and from the China Manufacturing/Non-manufacturing PMIs.

In the medium term trading from the short side remains favoured, looking for another run towards Friday’s lows of 0.7625 and eventually towards 0.7570 although that won happen today and I suspect we may drift a little higher."