Audusd declines as us housing market data disappoints

AUDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.42%	-27.5 Pips
Week to-date	0.66%	42.6 Pips
November	-1.09%	-71.7 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, the latest economic data from the Census Bureau indicates a slump in the housing sector. Housing starts in October fell to 1.311 million from a revised figure of 1.353 million in September. This represents a notable decline and is reflective of a drop by 3.1 million when juxtaposed with earlier reports of 1.354 million in the preceding month. Compounding this downward trend, building permits, a forward-looking indicator for future construction activity, drastically fell to -0.6 million from 1.425 million in September. These figures suggest a cooling off in the housing market, potentially due to higher interest rates and tighter lending conditions.

The aforementioned U.S. housing market data has had a consequential impact on the AUDUSD currency pair. On Wednesday, the Australian dollar slipped by 0.42% against the U.S. dollar, reaching 0.65060. The decline in U.S. housing starts and building permits may have contributed to this movement, as the weak housing data underscores potential vulnerabilities in the U.S. economy, possibly affecting the overall investor sentiment. Typically, weak U.S. economic data would negatively affect the USD, but the drop in AUD might be indicative of broader risk-averse market behavior, possibly favoring the USD as a safe-haven currency despite negative domestic data. Consequently, if these economic conditions persist without major upward revisions or changes in market sentiment, the AUDUSD could continue to face pressure.

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What can we expect from AUDUSD today?

AUDUSD on Wednesday dropped -0.42% to 0.65060. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks bearish as the pair posted lower in Wednesday trading session.

Looking ahead for the day, immediate support level is at S1 0.64786 with break below could see further selling pressure towards S2 at 0.64511. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.65443 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.64840 would indicate selling pressure.

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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