AUD/USD looks for support near 0.68 prior of Caixin Manufacturing PMI

After falling towards the round-level support of 0.6800 in the early Asian session, the AUD/USD pair is searching for buyers. The Australian dollar is volatile following the release of S&P Global Manufacturing PMI data. The economic data has decreased to 50.2, below both the consensus estimate and the previous publication of 50.4.

The US Dollar Index (DXY) has yet to resume trading following the shortened week. However, Friday's actions reveal a rich narrative. After 15 trading sessions of consolidation inside a range of 103.46-104.57, the USD Index broke to the downside, so breaking the consolidation. Tuesday's forward-looking price movement may do additional damage to the U.S. dollar.

Due to the release of the Caixin Manufacturing PMI data, the Australian Dollar will likely exhibit extreme volatility in the future. The consensus estimate predicts a decrease in the Manufacturing PMI to 48.8 from 49.4 before. In addition, the analysis of official Chinese Manufacturing PMI data reveals a drop in manufacturing activity. China's official Manufacturing PMI data decreased to 47.0 from 49.2 and 48.0 in the previous release.

A fall in Manufacturing PMI in China could be the result of an increase in Covid-19 cases following the Chinese government's efforts to get the economy back on track. Notably, Australia is China's top trading partner, and a higher-than-expected PMI might strengthen the Australian Dollar.

On the American front, investors will closely monitor the release of the Federal Open Market Committee (FOMC) minutes on Thursday. The minutes from the Federal Reserve's (Fed) monetary policy meeting in December will provide a full explanation for the 50 basis point increase in interest rates (bps).