Today, some key economic data for AUDUSD was released. Australia’s fourth quarter GDP was revised down to 0.5% and January YoY CPI fell to 7.4% from 8.4%, both signaling a slowdown in the economy. Australia’s 10-year government yield fell to 3.78% and the probability of a 25 basis point rate hike by the Reserve Bank of Australia fell to 76.2% after the data was released. AUDUSD began the day negatively with the latest data and fell below 0.67, but then Chinese data changed the game exactly one hour later.

China is Australia’s main trading partner by far. The metal and food-hungry giant’s imports from Australia fell last year, and with the strong dollar index, AUDUSD can’t catch a break all year long. After the end of the zero-COVID policy, the Chinese economy started to show some life. China’s February manufacturing PMI rose to 52.6 from 50.1, and non-manufacturing PMI rose to 56.3 from 54.4, way better than expected, signaling a faster increase in economic activity. With the data from China, AUDUSD turned positive for the day.

After breaking the uptrend channel from our older analysis, AUDUSD fell close to the middle point of the October-January run. After today’s data, a run to 0.6850 could be a possibility. On the other side of the scale, the USD will have key incoming data today as well. The ISM manufacturing and the sub-index of ISM, prices paid, will be important for both the dollar index and AUDUSD. A very strong ISM data could jeopardize the 0.6850 scenario and cause a downside break with a Fibonacci 61.8% target for the short-term.