AUD/USD falls back down following construction data disappointment

AUD/USD retreats on construction miss.
USD getting a push from bond yields.

Joshua Gibson FXStreet

AUD/USD has dropped lower again following a pick up in early Tokyo trading, and the pair is currently back down below 0.7880.

The Aussie slipped against the Greenback after a disappointment in the Construction Work Done figures for the 4th quarter of 2017, coming in at a 19.4 contraction, widely missing the median market forecast of a 10% decline, and a deep correction from the previous reading of 16.6%. While Wage Price Index data posted a mild beat over forecasts with year-on-year posting 2.1% versus the anticipated 2%, mixed economic data points for Australia continues to pigeonhole the Reserve Bank of Australia (RBA) in wait-and-see mode. Headline growth figures for Australia continue to lag behind global trends, and the RBA is left in a holding pattern, unlikely to raise key rates into 2020 while central banks around the world prepare to begin tightening their respective easy fiscal policies and prepare to fight inflation.

The US will see the Redbook Index at 13:55 GMT today, followed closely by a speech by FOMC member Harker at 14:00. Australia will be looking forward to New Motor Vehicle Sales and Private Capital Expenditure early Thursday at 00:30.

AUD/USD Technicals

With the Greenback experiencing newfound confidence and getting buoyed by rising bond yields, AUD/USD appears to have priced in a pullback following the turnaround from 0.7988. Daily candles are now trading just beneath the 34 EMA, with the 200-day SMA still below at 0.7770. Current support is priced in at 0.7854 and 0.7780, and resistance waiting to challenge any bullish swings at 0.7908 and 0.7966.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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