FxWirePro: AUD/USD edges higher from session lows, Aussie ignores softer China PMI

Chart - Courtesy Trading View 

AUD/USD was trading 0.32% higher on the day at 0.6368 at around 04:20 GMT.

The pair has edged higher from session lows at 0.6324, eyes to retake 0.64 handle.

Australian dollar has largely ignored softer than expected China PMI data and remains bid after upbeat Aussie trade numbers.

China’s Caixin Services PMI for October slipped to the lowest level in five months, printing at 48.4 versus 49.3 prior.

On the other side, Australia’s trade surplus increased to 12,444M In September versus 8,850M expected and 8,324M prior.

Details of the report showed Exports rallied by 7.0%, compared to 2.6% prior. However, Imports dropped to 0.4% versus 4.5% prior.

Escalating geopolitical tensions between North Korea and Japan join the risk-negative covid news from China to dent risk sentiment.

Also, Fed’s readiness for further rate hikes as suggested by Powell's hawkish comments, keep check on gains.

Technical Analysis:

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

- Recovery remains capped below 21-EMA and 5-DMA

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

- Bullish Stochastics divergence on the daily charts keeps scope for upside

Major Support Levels: 0.6339 (20-DMA), 0.6198 (Lower BB)

Major Resistance Levels: 0.6395 (21-EMA), 0.6480 (Upper BB)

Summary: AUD/USD was trading with a bearish bias. Recovery attempts lack traction. Price action is holding 20-DMA support, break below will see more downside.