Forex: AUD/USD circa 6-week low, critical China HSBC PMI

FXstreet.com (Barcelona) - The Australian Dollar exchange rate continues to offer a dire picture for the interest of dip buyers heading into the China 'flash' HSBC PMI, as the structure of lower lows and lower highs keeps on going.

On the recent slide to cheaper quotes Monday, the AUD/USD printed a new 6-week low at 1.0235 before unfilled buy orders off 1.0215/35 demand - as per the base-rally-based from last March 11 - snapped the price back up, although recovery was well capped by intraday supply produced in the last European session around 1.0280/90, as per the drop-base-drop (notice 5m chart).

Taking as the base case that the China the HSBC Manufacturing PMI disappoints -expectation is for 51.4/6 - the pair would need to breach mentioned demand below along with getting 1.02 out of the way, if the bearish scope is expand down to 1.0115/20, swing low. On the contrary, a better-than-expected number may see the pair retest 1.0280/90 all the way up to 1.03/0315, where a second layer of offers as per drop-base-drop from April 19 is defending sellers interest.

As the technical picture stands, assuming market reaction is equitable depending on China data surprise factors, looks like a positive surprise should come at a higher deviation from consensus vs a negative one if both layers of supply are to be taken out.
Note a deviation of 1.5/2 points from consensus should be the bare minimum requirement to see real substance on volatility.