February 22nd, 10:39 am by Barbara Zigah
(eToro Blog) Monthly PMI manufacturing data starts to trickle in today, with China among the first releases. News that China’s HBSC PMI data for February continues, for the 4th consecutive month, to fall into the contractionary territory has created new worries of a global economic slowdown. The Australian economy is heavily dependent on China’s growth for its own, and following the news, the AUD/USD fell to 1.0668. Sentiment on OpenBook has a slight bias toward long positions.
OpenBook Trader KENT1688 from Malaysia, who uses a medium-risk strategy and has 782 followers and 25 copiers to his credit, has been monitoring the situation carefully and making good use of the pair’s volatility. In the past day, he has opened more than a dozen positions, both longs and shorts as conditions warranted, and more often than not closed the trade shortly afterward for a profit; his statistics show that his hold period average is more than 15 hours. Over the last six months this trader has allocated nearly 83% of his portfolio to the AUD/USD, upping the allocation over the past week to 100% for a 4.7% gain, and is on target to post an 18.5% profit for the week.
Trader yazeedkhalid, in following the OpenBook sentiment, was able to close out four long positions in a matter of minutes, booking profits between 40% and 64%. Likewise, trader coreart closed out several longs over the past few hours, with an average return of nearly 29%.
Over the weekend, the People’s Bank of China lowered its reserve requirements for Chinese banks by 0.50%, and analysts expect that this flash PMI data, which if confirmed by the official data, could be the impetus for even more easing. Yesterday, the Australian Reserve Bank confirmed that it would continue to monitor economic conditions for signs of further slippage with a view to more easing should conditions warrant, and this Chinese news is likely to weigh considerably.
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