Australian Buildings Approvals measures the change in the number of new building approvals issued. 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 Thursday 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 indicator is a market-mover which can affect the movement of AUD/USD.
Building Approvals tends to fluctuate sharply, making accurate forecasts a tricky task. The indicator declined 4.7% in the previous release, well off the estimate of -0.7%. The markets are expecting a much better result this time around, with an estimate of a 2.9% gain. Will the indicator meet or beat the estimate?
Sentiments and levels
US releases continue to disappoint, but the Australian dollar has been unable to to take advantage. Earlier in the week, the RBA warned that the Aussie is overvalued, and the currency lost ground as a result. The Australian dollar has been pointing downwards all week, and this trend could continue. Thus, the overall sentiment is bearish on AUD/USD towards this release.
Technical levels, from top to bottom: 0.9751, 0.9670, 0.9556, 0.9428, 0.9283 and 0.9180.
- Within expectations: 1.0% to 5.0%: In such a case, the Australian dollar is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 5.1% to 8.0%: An unexpected higher reading can send AUD/USD well above one resistance line.
- Well above expectations: Above 8.0%: Such an outcome would prop up the pair, and a second resistance line might be broken as a result.
- Below expectations: -2.0% to 0.9%: A sharper decrease than forecast could cause the Aussie to break below one level of support.
- Well below expectations: Below -2.0%: In this scenario, AUD/USD would likely drop, possibly breaking a second resistance level.
For more about the Aussie, see the AUD to USD forecast.
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