AUD/USD dips below 0.71 as Australia consumer anxiety hits 3-year high

AUD/USD is trading in the red as the NAB data released earlier today validated RBA's dovish turn on rates.
Australia consumer anxiety hit three-year highs at the end of 2018.

Omkar Godbole FXStreet Contributor

The bearish pressure around the Aussie dollar is strengthening as National Bank of Australia 's (NAB) survey released earlier today validated Reserve Bank of Australia's (RBA) dovish shift on rates.

The AUD/USD pair is currently trading at 0.71, having hit a two-week low of 0.7097 soon before press time.

The NAB's Australia consumer anxiety index jumped to 62 points at the end of 2018 - the highest level in three years - mainly due to indebtedness and slower income growth. Rising anxiety means consumer spending will likely remain weak in the near future.

The data validates the RBA's view that consumer spending is a key risk to Australia's economy and its change of attitude on interest rates. The AUD, therefore, could soon drop to the immediate support at 0.7076 (Jan. 25 low)

Australia’s central bank governor Lowe on Wednesday opened the door to a possible rate cut, signaling a shift from its long-standing tightening bias. In response, the AUD/USD pair fell 1.77 percent - the biggest single-day drop since June 24, 2016.

AUD/USD Technical Levels

1. R3 0.7344
2. R2 0.7295
3. R1 0.7207
PP 0.7158
1. S1 0.707
2. S2 0.7021
3. S3 0.6933

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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