AUD/USD rises amid robust Chinese business activity, weaker US Dollar

• The Australian Dollar gains traction after China's PMI data signaled that the economy remained resilient in April.
• US Initial Jobless Claims reached their lowest point in almost 60 years at around 189K.
• The RBA will meet on May 5, with expectations of a potential third rate hike.

The AUD/USD recovers toward the 0.7190 price region on Thursday, erasing Wednesday's losses, as the Australian Dollar (AUD) benefits from data showing a resilient Chinese economy and a weaker US Dollar (USD).

The April Chinese NBS Manufacturing Purchasing Managers Index (PMI) rose to 50.3, higher than the expected 50.1, while the RatingDog manufacturing PMI also beat forecasts. The NBS non-Manufacturing PMI came below expectations, at 49.4, down from the forecasted 49.9. This better-than-expected data boosts the Aussie as China is one of Australia’s top trading partners.

In the United States (US), Initial Jobless Claims dropped to 189K, the lowest in almost 60 years, contrary to expectations of remaining stable at around 215K. Additionally, the PCE Price Index, the Fed’s preferred inflation measure, rose to 3.5% year over year in March from 2.8% in February, aligning with market forecasts.

Despite these positive job figures, preliminary Q1 GDP growth came in at 2%, below the expected 2.3%, which tempered investor enthusiasm over the USD.

The Reserve Bank of Australia (RBA) will have its next meeting on May 5. Investors expect the RBA to potentially hike interest rates for a third consecutive time amid persistently high inflation.

Short-term technical analysis:

On the four-hour chart, AUD/USD trades at 0.7183, holding a modest bullish bias as it stays above the 20-period and 100-period Simple Moving Averages (SMAs) at 0.7163 and 0.7134, respectively. The Relative Strength Index (RSI) hovers near 59, hinting at firm but not overstretched buying pressure as the pair edges toward nearby overhead barriers.

On the topside, immediate resistance appears at 0.7184, followed by a more significant cap near 0.7192, where prior supply is likely to re-emerge. On the downside, initial support is seen at 0.7167, backed by the short-term 20-period SMA around 0.7163, while deeper demand aligns at 0.7145 and the broader trend floor from the 100-period SMA near 0.7134.

(The technical analysis of this story was written with the help of an AI tool.)