The Australian dollar is mostly stronger today. While the currency is flat against the US dollar, the Aussie is rising against the euro, the British pound and the yen. AUD/USD continues to look overbought on a daily chart, and is due for a short-term pull back. Looking at recent economic data, consumer sentiment was lower than the previous print. In more positive news, home loans were ahead of expectations by a significant margin. Given the importance of real estate in Australia's broader economy, new mortgages are an important gauge for broader economic growth. Tomorrow is the most important day this week thanks to upcoming employment numbers. If new jobs are strong, rate hike expectation should rise accordingly. We have upgraded our medium-term outlook on the currency to bullish, while our short-term outlook is also bullish.
AUD/USD is up slightly and trading just above 0.7960. EUR/AUD is down and trading above 1.5340. GBP/AUD is flat and trading above 1.7280.
This is a very light week for economic data relating to the Australian dollar. Consumer sentiment (1.8% vs. 3.6% prior) and investment lending for homes (1.5% vs. 1.6% prior) was lower than the previous print. Home loans beat expectations (2.1% vs. -0.2% expected). Tomorrow is the big day, and we'll get employment figures as well as HIA new home sales. Last week, retail sales beat expectations by a significant margin.
As the Australian dollar strengthens thanks to strong commodity prices and global growth, we are upgrading the currency to bullish. Looking at a daily chart of the Aussie, the currency is now looking overbought. This is based on various technical indicators.
As the Australian dollar rebounds, we are now bullish on the Australian dollar in the medium-term. Looking at a weekly chart, the Aussie is trading within normal conditions. Our analysis is based on various technical indicators.