- Australia building approvals fell 5 percent month-on-month in April.
- Aussie is already on the back foot, courtesy of the risk aversion and bear flag breakdown.
Australia building approvals or permits fell 5 percent month-on-month in April compared to a 2.6 percent rise seen in March. The markets were expecting a reading of -3.0 percent.
Further, the annualized figure came in at 1.9 percent vs 4.1 percent expected and 14.5 percent previous.
The weaker-than-expected figure could bolster the already bearish technical setup in the AUD/USD pair.
Daily chart
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Spot rate: 0.7500
Daily high: 0.7510
Daily low: 0.7476
Trend: Bearish
The bull flag breakdown seen in the chart above indicates the sell-off from the April 19 high of 0.7813 has resumed. The weaker-than-expected Aussie building permits data, coupled with risk aversion in the equities only add credence to the bear flag pattern and could yield a drop to 0.7447 (May 16 low).
As of writing, the pair is trading at 0.7500 – largely unchanged on the day, having a hit a session low of 0.7476 earlier today.
AUD/USD Technical Levels
Resistance: 0.7522 (May 23 low), 0.7540 (10-day MA), 0.7567 (May 11 high).
Support: 0.7488 (May 18 low), 0.7476 (session low), 0.7447 (May 16 low).
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