The AUD/USD pair churned in thin holiday trading on Monday, attempting to climb but ultimately returning to its opening bids near 0.6220. With Australian markets largely inactive during the first half of the week, trading volumes remain too low to support meaningful moves. However, upcoming Chinese economic data may prompt some directional activity.
Chinese Data in Focus Amid Global Holiday Slowdown
While global markets remain subdued heading into the new trading year, China is poised for action with significant economic releases. The NBS Manufacturing and Non-Manufacturing Purchasing Managers Index (PMI) figures are scheduled for early Tuesday, followed by the Caixin Manufacturing PMI data on Thursday after Wednesday’s New Year’s Day holiday.
The NBS Manufacturing PMI for December is forecasted to remain steady at 50.3, while both the Non-Manufacturing and Caixin Manufacturing PMIs are expected to show slight improvements. These figures could influence the Australian Dollar, given the close trade ties between China and Australia.
Limited US Market Activity Until Year-End
US market flows are also muted in the lead-up to New Year’s Day, with little to sway the Greenback until Friday’s release of the ISM Manufacturing PMI for December. The PMI is anticipated to dip slightly to 48.3 from 48.4, which could affect broader USD sentiment.
AUD/USD Technical Outlook
AUD/USD continues to hover near a 26-month low of 0.6199 reached in mid-December. Attempts at a bullish recovery have seen limited success, with the pair confined to the lower end of its recent consolidation range.
Downside risks persist, with the 50-day Exponential Moving Average (EMA) declining through 0.6435 and exerting downward pressure on the pair. A fresh retest of multi-year lows remains likely unless significant bullish catalysts emerge from upcoming Chinese or US economic data.
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