AUD/USD challenges former resistance-turned-support after dismal Aussie housing data

• AUD/USD is on the defensive, having printed session lows below the former resistance-turned-support of 0.7232 (Jan. 11 high) a few minutes ago.
• Australian building approvals fell sharply for a second consecutive month in December, bolstering the already growing fears about the economy.

The Aussie dollar fell in the red after the Australia Bureau of Statistics (ABS) said building approvals had dived more than expected in December.

Total approvals fell by 8.4% to 13,995 after seasonal adjustments, missing the estimated 1.8 percent rise by a big margin. The previous month’s print has been revised lower to -9.8 percent from the initially reported -9.1 percent.

In annualized terms, approvals tanked 22.5 percent, following a 32.8 percent slide in November.

The deterioration in housing market condition is likely associated with tighter lending standards and could put pressure on the Reserve Bank of Australia (RBA) to adopt a dovish stance.

No wonder, AUD/USD has fallen back to the former resistance-turned-support of 0.7232. As of writing, it is trading at 0.7238, having printed a session low of 0.7228 a few minutes ago. A daily close below 0.7232 would neutralize the immediate bullish view put forward by last Wednesday’s close at 0.7247.

AUD/USD Technical Levels