The Australian dollar is moving up within current ranges, edging closer to the 0.77 level as it gets some tailwinds. Can it make a move and challenge the next resistance levels? These are 0.7740 and 0.7840.
Here are the three most recent drivers of AUD/USD:
- Australian confidence: The NAB Business Confidence measure jumped from 6 to 10 points in January. The National Australia Bank’s survey of 350 business reflects solid growth. This is the highest level since 2015.
- China heating up: Australia’s No. 1 trade partner reported inflation figures and it seems that the world’s No. 2 economy is now exporting inflation rather than deflation. This is evidence of growing demand, including Australia’s raw materials. CPI is up 2.5% y/y against 2.4% expected. Producer prices, which were in the red for quite a long time, are up 6.9% y/y, also exceeding predictions.
- Michael Flynn: After a few stable days at the White House, a scandal is embroiling the Trump Administration once again. The National Security Adviser Michael Flynn was forced to resign over contacts with the Russian embassy and a consequent conversation with Mike Pence. He lasted only three weeks in office and was controversial anyway. While security is not the economy, it is hard to remain optimistic about Trump’s chances to boost the economy. This weighs on the greenback.
Here is how the recent move looks on the AUD/USD chart:
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