Forex Daily Review: China Initiated the Bearish Outlook for Gold, Crude Oil and AUD

AUD/USD

My focus on AUD/USD is paying off. As expected, HSBC China Manufacturing PMI remained below 50.0, which indicates the economy is still contracting. A slowdown in China means it may purchase less goods from Australia, denting the AAA Australian sovereign rating. The Australian dollar (AUD) is expected to weaken against a basket of currencies on the fears that the Reserve Bank of Australia (RBA) will act and cut rates to counter the slowdown in China at the next monetary policy. The main trigger for Aussie-selling was a decline in China cola imports.

Gold

XAU/USD (gold) posted heavy losses as a result of the HSBC Manufacturing PMI. This was also expected as Ioutlined in my analysis. Despite the Fed's QE3, the weakness in gold and AUD are expected to continue throughout the upcoming months.

Brent Crude Oil

I also highlighted the death cross in my Brent crude oil technical analysis that hinted strong weakness is about to take place. Crude oil contracts were smacked lower and are expected to continue the downtrend as long as China's economy remains in contraction.
Spain Bond Auction

Spain is due to issue a new 3-year benchmark, 3.75% October 2015 Bono and 10-year benchmark, 5.85% Jan 2022 Obligacion for between €3.5 - 4.5 billion. The Spanish auction results are due at 08:40am GMT and may determine the EUR/USD trend for today's session.