AUD/USD: No response to weaker-than-expected China PMI

• AUD/USD holds above 0.70 after a below-forecast China Caixin PMI. 
• The manufacturing activity expanded at a slower rate in December. 
• PBOC will lower RRR for commercial banks by 50 basis points from Jan. 6.

AUD/USD is barely moving even though key data released soon before press time showed China's factory activity expanded at a slower rate in December

China's Caixin/Markit manufacturing Purchasing Managers' Index (PMI) for December came in at 51.5, missing the expected print of 51.7 and down from the seven-month high of 51.8 registered in December. 

Caixin's PMI surveys small and medium-sized export-oriented units. While the above-50 reading indicates the activity expanded in December, the decline from 51.8 to 51.5 suggests deceleration and is bad news for the Aussie dollar, a proxy for China.

So far, however, the Australian dollar has shown resilience. The AUD/USD pair is currently trading at 0.7015, representing no change on the day, having hit a low of 0.7006 in early Asia. 

The People's Bank of China (PBOC) said Wednesday that the required reserve ratio for commercial lenders will be lowered by 50 basis points from Jan. 6, releasing about 800 billion yuan ($115 billion) of liquidity into the financial system. 

The central bank's continued action to lower borrowing costs may bode well for the risky assets, putting a bid under the AUD. Technical charts, however, indicate scope for a correction below 0.70. 

Technical levels