Audusd declines 0.4% amid mixed Australian economic data and cautious market sentiment

AUDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	-0.4%	-26 Pips
Week to-date	-0.44%	-28.6 Pips
December	-0.49%	-31.6 Pips

Upcoming key events (London Time)

Wed 12:30 AM AUD GDP (3-mth)

What happened lately

In Australia, building approvals have seen a decrease in October, dropping to 4.2% from the previously revised figure of 5.8%. This downward revision indicates a potential slowdown in the construction sector, which can be attributed to various factors including possibly tighter financial conditions or a cooling real estate market. On the other hand, retail trade turnover in October showed a promising increase to 0.6% from 0.1% in September. Such growth in retail sales suggests that consumer spending is on the rise, which is a positive sign for the overall economy as it reflects consumer confidence and demand. Furthermore, the 12-month TD Securities Inflation rate in November showed a slight decrease to 2.9% from 3% in October, suggesting that inflation pressures might be slowly easing in the country. These figures were reported by the Australian Bureau of Statistics.

The mixed economic data coming out of Australia could have varied impacts on the AUDUSD exchange rate. The drop in building approvals might raise concerns about the strength of the housing market, potentially weighing on the Australian dollar. Conversely, the rise in retail trade turnover might provide some support to the AUD, indicating a resilient domestic economy. However, given that inflation is slightly decreasing, there could be less urgency for the Reserve Bank of Australia to adjust interest rates aggressively, which might influence expectations for the currency. The AUDUSD’s decline by -0.4% to 0.64740 on Monday reflects a cautious market sentiment. Traders might be positioning defensively ahead of the upcoming GDP data release, which could provide further insights into Australia’s economic trajectory. The real drivers of the currency movement will likely be the market’s expectations and interpretations of these economic indicators and their potential impact on monetary policy.

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What can we expect from AUDUSD today?

AUDUSD on Monday dropped -0.4% to 0.64740. Price is below 9-Day EMA while Stochastic is rising.

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

Looking ahead for the day, immediate support level is at S1 0.64407 with break below could see further selling pressure towards S2 at 0.64074. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.65109 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.64425 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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