AUD/USD drops to lowest since Feb. 12 after dismal China data

• China services PMI missed estimates, pushing AUD/USD to lowest since Feb. 12.
• The support at 0.7054 could come into play if the RBA statement sounds dovish. 

The already weak AUD/USD slipped to a session low 0.7066 - the lowest level since Feb.12 after a big miss on China data.

The widely tracked services purchasing managers’ index (PMI) for February came in at 51.1, missing the estimate of a rise to 53.8 from the previous month’s print of 53.6. 

Notably, the gauge for new business dropped, suggesting slowing growth in demand across the services sector and both input and output costs edged up. 

The AUD, therefore, shed 12 pips after the release of the dismal data. As of writing, AUD/USD is trading at 0.7071. 

The focus now shifts to Reserve Bank of Australia (RBA) rate decision, due later today. The central bank put rate cuts back on the table last month and since then major Australian lenders like Westpac have called two rate cuts this year. 

The immediate support at 0.7054 (Feb. 12 low) could be breached if the RBA sounds more dovish-than-expected, forcing markets to price in the possibility of two or more rate cuts this year. 

AUD/USD Technical Levels