The Australian Building Approvals indicator, released monthly, measures the change in the number of new building approvals issued. As such, it is one of the most important indicators of the construction sector. A reading that is higher than the market prediction is bullish for the Australian dollar.
Here are all the details, and 5 possible outcomes for AUD/USD.
Published on Wednesday at 00:30 GMT.
An increase in building approvals indicates an expansion of construction activity, which in turn is a critical component of economic growth. Conversely, negative readings indicate a contraction in building activity.
The Building Approvals indicator, which tends to fluctuate sharply, has been on a steady upward climb since July. October’s reading came in at a sizzling 11.4%, but the November forecast is for a severe correction of -4.5%.
Sentiments and levels
Although the Australian economy has generally been stable, analysts are predicting weaker figures in the retail sales and services sectors. As well, there is still room for an interest rate cut, which would weaken the Aussie. Thus, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels, from top to bottom: 1.1012, 1.0880, 1.0764, 1.06, 1.0480, 1.04 and 1.0314.
- Within expectations: -6% to -3%: In such a case, AUD/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: -2.9% to -1.4%: An unexpected higher reading can send AUD/USD well above one resistance line.
- Well above expectations: Above -1.4%: Such an outcome would prop up the pair, and a second resistance line might be broken as a result.
- Below expectations: -6.1% to -7.6%: A sharper decrease than forecast could cause the Aussie to drift and lose one level of support.
- Well below expectations: Below -7.6%: A negative reading much lower than forecast will cause AUD/USD to drop, possibly breaking a second resistance level.
For more about the Aussie, see the AUD to USD forecast.Get the 5 most predictable currency pairs