AUD Daily Updates

18 January 2018

The Australian dollar continues to shine, and is stronger against most of its global peers. The currency is particularly strong against the US dollar. Looking at recent economic data, new jobs were much higher than consensus forecasts. While the unemployment rate ticked up, the number of new jobs and the improving participation rate suggests a healthy job market. While the Reserve Bank of Australia has firmly resisted raising rates despite an ongoing economic recovery, good data may change the Bank's opinion in the near future. Earlier this week, mortgage lending figures showed that the ongoing real estate boom remains in full swing. Our short-term and medium-term outlook on the currency remains bullish. 

AUD/USD is up and trading just above 0.790. EUR/AUD is up slightly and trading above 1.530. GBP/AUD is up slightly and trading above 1.7360. 

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). Employment (34.7k vs. 9k expected) beat expectations while HIA new home sales (0.7% vs. 1.6% prior) was lower than the previous print. Last week, retail sales beat expectations by a significant margin. 

Updated 
Short term outlook
Bullish

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.  

Medium term outlook
Bullish

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.  

Updated