• AUD/USD slipped on Friday after data showed China’s factory activity contracted again in October, pressuring the AUD
• China’s manufacturing activity contracted for the seventh consecutive month in October, according to official data released Friday.
•China’s official manufacturing PMI slipped to 49.0 in October from 49.8 in September, marking a six-month low, according to data from the National Bureau of Statistics.
• Shifts in China’s economy often ripple through to the Australian dollar (AUD) due to Australia’s strong trade dependence on China.
• Separate data showed, Australia Q3 PPI increased 1.0% q/q and 3.5% y/y, compared with prior readings of +0.7% and +3.4%, respectively..
• Market consensus suggests the RBA will maintain a cautious approach amid signs that consumer spending is cooling and the labor market is stabilizing.
• Immediate resistance is located at 0.6612(38.2%fib), any close above will push the pair towards 0.6634(Higher BB)
• Support is seen at 0.6545(50%fib) and break below could take the pair towards 0.6531(SMA 20).
Recommendation: Good to sell around 0.6560 with stop loss of 0.6600 and target price of 0.6500
