AUD and Chinese PMI




  • Previous 50.5 – Expected 50.4

  • Above Expected: AUD Bullish

  • Below Expected: AUD Bearish

  • Key pairs to watch: AUD/USD, AUD/JPY

While Chinese data tends to affect all the market, Aussie feels it the most due to the strong commercial relationship in between both economies. And besides the data market sentiment needs to be weighted today, as there’s a general risk aversion sentiment post FOMC that will likely extend to current Asian session. Overall, Chinese data has been mixed lately, while PMI is barely standing above 50: a worse than expected reading should favor more dollar gains against its Australian rival, while if somehow PMI fells below 50, dollar advance will likely be seen across the board. 



A positive number, above 51 may lead to an Aussie temporal recovery, but beware the dominant trend is strongly bearish, and sellers will try to halt the advance.



GBP and Gross Domestic Product




  • Previous 0.3%  - Expected 0.3% 

  • Above Expected: GBP Bullish

  • Below Expected: GBP Bearish

  • Key pairs to watch: GBP/USD, EUR/GBP, GBP/JPY


The fact that GDP surprised to the upside printing 0.3% in its preliminary reading on April 25th, gave support to Pound that soared against major rivals. But from then on, macroeconomic data including employment and Retail sales disappointed, emphasizing the fragile situation of the UK. Being this a second revision of such preliminary reading, the degree of deviation should not be enough to take Pound out of its current bearish trend. 



A better than expected reading may gave GBP some temporal support across the board, but sellers will likely halt the advance and jump into spikes higher, limiting gains. A downward revision will only feed current market sentiment and trend. 



USD and Manufacturing PMI




  • Previous 52.1  - Expected 51.6

  • Above Expected: USD Bullish

  • Below Expected: USD Bearish

  • Key pairs to watch: EUR/USD, GBP/USD, AUD/USD, USD/JPY


Manufacturing PMI has topped in January this year at 56.1, falling ever since towards latest disappointing reading of 52.1. Dangerously close to 50, the line that separates growth from recession, a better than expected figure, particularly above that 52.1 will likely point for a continued recovery in the US economy and reinforce the idea of QE tapering anytime later this year. Below 51 picture turns darker: dollar can lose momentum particularly against European and commodity rivals.



However, stocks will have the last word and in a risk aversion environment, a negative reading but not completely discouraging could end up favoring further greenback gains.