AUD Daily Updates

19 January 2018

The Australian dollar is currently mixed. While the Aussie continues to strengthen against the US dollar, it is flat against other major currencies including the euro and the British pound. Thanks to a strong jobs report and strength in the Chinese yuan, the currency has good reasons to keep rallying. On the other hand, AUD/USD is looking significantly overbought according to technical indicators on a daily chart. As such, the currency may experience a short-term pull back around the psychological barrier of 0.80. Thanks to the continuation of a US dollar bear market and optimism for global growth, the longer-term Australian dollar bull market remains intact. Our short-term and medium-term outlook on the currency remains bullish.  

AUD/USD is up and trading just above 0.80. EUR/AUD is up slightly and trading above 1.5290. GBP/AUD is flat and trading above 1.7340. 

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