AUDUSD Extends Its Bullish Offensive
AUD/USD: Upbeat Data Supports Aussie
New home sales, retail spending, and overseas trade figures from Australia on Thursday all pointed to a solid end to the first quarter, sending the Australian dollar towards the $0.7500 mark.
Australia's Housing Industry Association (HIA) kick-started the day with its monthly new home sales report, which showed sales rising 8.9% month-on-month in March, the strongest pace in six years.
Housing figures were quickly followed up by the simultaneous release of retail sales and international trade data from the Australian Bureau of Statistics (ABS).
Retail sales rose 0.4% month-on-month in March, the biggest increase since November and better than the 0.3% increase forecast by analysts.
Australian trade figures were probably the most impressive though, showing a 4% rise in exports in March, led by mining shipments. The trade gap shrank from a revised $3.04 billion in February to $2.16 billion the following month, coming in much stronger than the consensus forecast of a $2.90 billion shortfall.
The AUD/USD rose 0.54% to $0.7492 on Thursday afternoon in Sydney from $0.7451 at the close of trade in New York on Wednesday, hitting a high of $0.7493 after the data was released.
"March’s Australian international trade and retail sales data suggest that a boost to GDP growth from net trade probably more than offset an easing in consumption growth in the first quarter," assistant economist at Capital Economics Kate Hickie said in a note. "We estimate that real GDP growth accelerated from the fourth quarter’s 0.6% to about 0.8%."
AUD/USD Technical Analysis: Aussie Back Above 100 Day SMA After China's Inflation Data
We are witnessing a temporary post-rate-cut recovery that we foresaw yesterday, as the pair climbed back over $0.7332, which is the 50% Fibonacci Retracement of its February - April upside, and even rose back over the 100 day simple moving average at $0.7339.
The pair found serious support exactly at the $0.7300 figure on Tuesday morning, after China, Australia's largest consumer, released enhancing inflation numbers. The healing effect of the Chinese data was multiplied by the Relative Strength Index, which was too close to an oversold territory, having its own potential to launch correction, as we noted yesterday.
On the upside, the 38.2% Fibonacci at $0.7450 could be the next target, if the immediate resistance at $0.74 is unable to bear the bulls' pressure, while $0.7597 (23.6% FE) could be strong enough to cap the gains for this week.
However, with the MACD still deep below the signal line, the bearish trend is obvious and the recovery is likely to be temporary.
On the downside, we could see the pair falling below the 200 day SMA in the coming days, possibly testing the 61.8% Fibonacci at $0.7213 with a near-term perspective of the 76.4% FE at $0.7066.
Australia March Home loans: -0.2%, (not -0.9%) m/m (expected -1.5%)
Housing finance data from the Australia Bureau of Statistics, for March
- expected -1.5% and prior +1.5% m/m
- prior +4.1% m/m
- prior +1.7% m/m
Australia - Consumer Inflation Expectation (May): 3.2% (prior 3.6%)
Seems rather high given the recent CPI result
Australian Q1 GDP - more on the HUGE beat
March quarter GDP data from Australia, a bit of a recap now the dust has settled
- Exports contributed +1%. This is the dividend from all that mining infrastructure investement, the 'production phase' now kicking in. If the terms of trade improve 9i.e. commodity prices improve) ... this will improve even more
- Household final consumption expenditure added 0.5% ... this is being helped by low unemployment and jobs growth ... more workie, more spendie ... yeah?
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AUDUSD. With the pair strengthening further on Wednesday and following through on Thursday, it looks to move higher to the 0.7400 level and beyond. On the downside, support resides at the 0.7300 level where a breach will aim at the 0.7250 level. Below that level will set the stage for a run at the 0.7200 level with a cut through here targeting further downside pressure towards the 0.7150 level. On the upside, resistance lies at the 0.7400 level. A cut through here will turn attention to the 0.7450 level and then the 0.7500 level where a violation will set the stage for a retarget of the 0.7550 level. On the whole, AUDUSD remains biased to the upside.