AUDUSD sank as stronger than expected GDP data out of the US sent investors flocking to the US dollar, with the economy growing at an annualised growth rate of 4% last quarter (exp. 3.0%). This highlights that the recovery is back on track after a dismal start to the year
In Q1, poor weather, inventory rundowns and other factors resulted in a revised 2.1% annualised fall in GDP. Last quarter’s strong performance is partly due to the economy playing catch-up (an inventory build-up contributed 1.7% to the overall GDP figure) but it also reflects the underlying of the US economy. This strength should be enough to materially bring up the unemployment rate in preparation for higher interest rates.
In Australia, the market is waiting for the release of Australia’s building approvals data (1130AEST). The market is currently expecting building approvals to remain flat in June, after an impressive 9.9% m/m jump in the prior month. We aren’t expecting today’s data to rock the boat, as even a weaker than expected number wouldn’t put much of a dent in the strong performance of the property market this year.
From a technical perspective, AUDUSD has broken a short-term support zone but it’s finding some stronger support around its 100-day SMA. Daily RSI is also testing a key support level, a break of which would push the indicator into bearish territory. In which case, we would be eyeing 0.9210 and the pair’s 200-day SMA.
Source: FOREX.com
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