FxWirePro: AUD/USD grinds lower on softer China PMI, eyes trendline support at 0.6620

Chart - Courtesy Trading View 

Spot Analysis:

AUD/USD was trading 0.26% lower on the day at 0.6666 at around 04:55 GMT

Previous Week's High/ Low: 0.6737/ 0.6633

Previous Session's High/ Low: 0.6737/ 0.6670

Fundamental Overview:

Antipodeans drifted lower on Monday after data from China showed that growth in the nation's manufacturing sector was slowing after an initial post-COVID bounce.

Caxin survey showed on Monday that manufacturing growth in China slowed sharply in March, barely remaining in expansion territory and retreating from an eight month high of 51.6 hit in the prior month. 

The Caixin Purchasing Managers’ Index (PMI) grew 50 in March, missing expectations for growth of 51.7, as a post-COVID economic boom runs out of steam. 

Data points to an uneven economic recovery in the country, which could dent its appetite for commodities and related currencies. 

Focus now on the policy meeting from the Reserve Bank of Australia (RBA), with markets wagering on the first pause after 10 straight interest rate hikes.

A slew of U.S. economic readings this week which will provide more cues on the Fed monetary policy will also be key for price movement.

Technical Analysis:

- AUD/USD is extending the bearish gap open, down for the second straight session

- Momentum is bearish, Stochs and RSI are biased lower, RSI is below the 50 mark

- GMMA indicator shows major trend is bearish, while minor trend is turning bearish

- Price action is well below cloud and Chikou span is biased lower

Major Support and Resistance Levels:

Support - 0.6620 (Rising trendline), Resistance - 0.6694 (21-EMA)

Summary: AUD/USD was trading with a bearish bias. The pair is on track to test major trendline support at 0.6620. Bearish invalidation only above 200-DMA.