Australia data dump: Aussie holds steady despite positive data

We have had a number of key releases for Australia which have had little impacted the domestic currency: 

• The November Australia business confidence survey from NAB.
• The Mid-Year Economic and Fiscal Outlook – (or, aka, MYEFO).
• House Price Index (QoQ) & (YoY) (Q3).

The main takeaway from a closely watched measure of Australian business conditions showed activity remained muted in November as weakness in manufacturing warred with strength in services, pointing to still subdued growth across the economy - (Reuters). 

Outcomes

• House Price Index (QoQ) (Q3) 2.4% vs 0.2% and prior -0.7% (big beat, bullish for AUD).
• House Price Index (YoY) (Q3) -3.7 vs -7.4% prior, (bearish for AUD).

Description of the House Price Index

The House Price Index released by the Australian Bureau of Statistics shows changes in housing prices of major cities in Australia. The housing prices are considered a key indicator for inflationary pressures. A high reading is seen as positive or ( Bullish ) for the AUD, while a low reading is seen as negative ( or Bearish ).

• National Australia Bank's Business Confidence (Nov) 0 vs expected 0 vs prior 2.
• National Australia Bank's Business Conditions (Nov) 4 vs expected 2 vs prior 3 (revised to 4) (Bullish for AUD although is still blow a long-run average of 6).

Description of NAB´s Business Conditions

The NAB´s Business Conditions released by the National Australia Bank looks at trading, profitability and employment conditions in Australia. It serves as an indicator of the overall economic situation in the short term. A high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).

• The MYEFO: More to come...

Description of the MYEFO

The Mid-Year Economic and Fiscal Outlook (MYEFO), published by the Australian Government, updates the economic and fiscal outlook from the previous budget.

FX implications

• AUD/USD support levels: 0.6800 0.6770  0.6730  
• AUD/USD resistance levels: 0.6865 0.6890 0.6920

The focus is on the Reserve Bank of Australia, (RBA) in the main and the markets are already pricing a 65% chance of easing at the Feb RBA meeting – it will take something significant to shift such sentiment and the Aussie will likely remain under pressure due to the trade war saga between the US and China. AUD trades as a proxy to the trade wars. 

"The AUD/USD pair is neutral in the short-term, having found intraday support at the 38.2% retracement of its November slump at 0.6820. In the 4-hour chart, it is developing below the 20 and 200 SMA, both lacking directional strength, while technical indicators hover around their mid-lines, with modest upward slopes. The bearish case would be confirmed on a break below the 0.6800 figure, while the upside will remain limited by sellers aligned around 0.6865," 

- Valeria Bednarik, Chief Analyst at FXStreet explained.