AUD/USD: oil and equities undermine Aussie's rally
AUD/USD Current price: 0.7857
- Aussie's recovery stalled below key 0.7890 level.
- NAB's Business conditions and confidence indexes reflect improved economic outlook.
The AUD/USD pair kept advancing at the beginning of the day, as dollar's broad weakness coupled with solid macroeconomic figures coming from Australia. The NAB's Business Confidence index surged to 12 in January, its highest in nine months, while the Business Conditions index, surged to 19 from a previous 13, both well above market's expectations and reflecting an improved economic outlook. China's figures, despite less relevant, were also positive, with M2 Money Supply up in January 8.6%, and New Loans totaling 2,900 billion from the previous 584B.
Further backing the Aussie were gold prices, up to fresh 1-week highs. The US has little of relevance to offer from the macroeconomic side, with market players focusing on equities and yields for direction, both on retreat after yesterday's sharp advance. Commodity-related currencies' recovery today, is modest compared to other higher-yielding currencies, as lower oil prices, alongside with easing equities undermine their advance.
The pair is still below 0.7890, the 38.2% retracement of the December/January rally and a major static resistance level, having peaked for the day at 0.7876. In the 4 hours chart, the 20 SMA turned higher below the current level, now converging with the 23.6% retracement of the same rally at 0.7820, although technical indicators lost upward strength, now directionless within positive territory.
Support levels: 0.7810 0.7780 0.7750
Resistance levels: 0.7840 0.7890 0.7920
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
