- Damage to global risk-off continues to take its toll on the Aussie pair.
- Australia’s housing and private capital expenditure data are in the spotlight.
- The US GDP will also grab headlines.
Having declined on the negative catalysts for the Antipodeans, the AUD/USD pair is trading near 0.6920 during the early Asian session on Thursday.
Not only rising tension between the US and China, recently due to China’s signal to cut rare earth exports to the US, but sluggish manufacturing data from the US also contributed to the Aussie pair’s weakness.
Providing additional toll to the pair sentiment was its appeal as a risk barometer. Global investors have been running towards risk safety off-late mainly because of the US-China trade tension and the same weigh on the Australian Dollar (AUD).
Another such risk barometer is global treasury yields that are in red recently with the US 10-year benchmark under the 3-month yield.
Looking forward, April month data for HIA new home sales, building permits and first quarter (Q1) reading of private capital expenditure will be in the spotlight together with trade war developments.
While new home sales declined -0.1% earlier, private capital expenditure may soften to 0.5% from 2.0% previous. Further, building permits could flash 0.0% mark versus -15.5% prior on a monthly basis. It should also be noted that yearly building permits growth figures were down at -27.3%.
At the US, all eyes will be on the preliminary gross domestic product (GDP) data for Q1 2019 with April month pending home sales likely entertaining investors then after. The US GDP annualized is expected to soften to 3.1% from 3.2% while pending home sales might decline to +0.9% from +3.8% earlier.
Technical Analysis
The recent high surrounding 0.6940 limits the pair’s near-term upside, a break of which can recall 0.7000 and 50-day simple moving average (SMA) level near 0.7040.
Alternatively, 0.6900, 0.6860 and the year 2016 low near 0.6830 seem important downside supports to watch.
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