Audusd rises as us housing data shows decline in October

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.33%	21.7 Pips
Week to-date	1.04%	66.9 Pips
November	-0.7%	-46 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

The U.S. housing market showed a decline in October, as evidenced by the decrease in Housing Starts and Building Permits. According to the Census Bureau, Housing Starts dropped to 1.311 million from a revised 1.353 million in September, marking a reduction of approximately 42,000 units month-on-month. This decrease points towards a slowdown in residential construction activity, a critical component of economic growth as it influences various sectors such as labor, consumer spending, and raw materials demand. Furthermore, Building Permits, a forward-looking indicator of future construction activity, fell significantly by 2.025 million from the revised September figure to reach -0.6 million. This notable reduction in permits suggests a potential further downturn in the future construction pipeline, which may affect economic planning and forecasting.

In terms of currency implications, the Australian Dollar to U.S. Dollar (AUDUSD) exchange rate saw an increase of 0.33% to 0.65296 on Tuesday. The decline in U.S. housing data could lead to a weakening of the U.S. Dollar as it may cause investors to adjust their expectations regarding economic performance and monetary policy in the United States. If this is perceived as a sign that the Federal Reserve might adopt a more cautious approach to raising interest rates, due to a cooling housing market and broader economic implications, demand for the U.S. Dollar might decrease, thereby benefiting alternative investments such as the Australian Dollar. In turn, this can bolster the AUDUSD pair, although the extent of this movement would depend on other concurrent economic data and market sentiment.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday rose 0.33% to 0.65296. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks bullish as the pair ended higher after Tuesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.65485 with break above could target R2 at 0.65673 or figure level area. While towards the downside, we are looking at daily low of 0.64818 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.65340 may suggest continuation after recent positive movement.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

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