AUD/USD Approaches Major Support Zone After Australian Building Approvals Declines

AUD/USD – Technical Analysis for Forex Trading & CFDs.

Australia – Building Approvals

Today, at GMT 1:30 a.m., the Australian Bureau of Statistics released the national month-over-month building approvals figure, which measures the changes in the number of approvals of new buildings.

Since a build permit indicates new construction work, it suggests that there would be additional positive economic activities. For example, new jobs would be created for construction workers. Therefore, Forex traders consider this data regarding new building approvals to be a leading indicator of the overall economic health of the country.

Last month, the building approvals figure increased by 4.8% and the forecast for this month was set at a decrease of -1.2%. However, the actual figure came out much lower than what the market was expecting, at -5.6%.

United States – Unemployment Claims

On Thursday, at GMT 12:30 p.m., the US Department of Labor will release the unemployment claims figure, which measures the changes in the number of people who claimed for unemployment insurance over the last week.

Australian Forex investors consider the unemployment claims data to be one of the most important fundamental indicators of the US job market. This is primarily because unemployment and consumer spending has direct correlation and an increasing number of unemployment claims indicate lower consumer spending in the economy, which makes up the bulk of the economic activity in the United States.

Last week, the US unemployment claims figure came out at 244,00 and the forecast for this week is set at an increase to 245,000.

AUD/USD Forecast

AUD/USD Analysis for Australian forex - 4th July 2017

Since breaking above the downtrend line on May 22, the AUD/USD remained bullish and the price has climbed up by around 170 pips over the course of June. Nonetheless, last week, the AUD/USD found a strong resistance near the 0.7635 level, but last week, it broke above this level. However, on June 30, the AUD/USD formed a bearish pin bar and so far, the price appears to be approaching the 0.7635 level, which would likely act as s support now.

Forex traders should take note that even if the support near 0.7635 is broken, the current uptrend line would likely to provide an additional layer of support due to the close proximity.

As the Australian building approvals figure declined by -5.6%, but the US unemployment claims figure is expected to only increase from 244,000 to 245,000, we believe the fundamental outlook for the AUD/USD would likely remain bearish this week. Therefore, if the AUD/USD breaks below both the support near 0.7635 and the uptrend line, it would likely to attract additional bearish momentum in the market.

Hence, Australian Forex traders should look out for trading opportunities below this major support level and the uptrend line.

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Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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