AUDUSD: Business Confidence Index Failed to Attract Bids
Aussie trading at daily low during the European trading at 0.6950, as President Donald Trump threatened to impose another round of tariffs on Chinese goods if he does not reach a deal with his Chinese counterpart at the G-20 summit later this month. The business confidence index in Australia rose to 7 in May from April’s reading of 0 at the analyst’s consensus. The NAB survey shows the forward-looking indicators remain weak. For instance, forward orders declined further in May and capacity utilization fell below average. The surveys also show weak price pressure across inputs and final products. The figures failed to impress investors as they continue to sell AUD. A positive sign for the pair is the rise over 4 percent in Iron-ore prices, Australia’s top export product.
The Aussie failed to capitalize the USD weakness the previous week. As of writing, the pair trades at 0.6950 at the daily low. The pair breached the 200 hour moving average support zone in early European session and shorts took the upper hand for one more day. On the downside immediate support stands at 0.6860 YTD low. On the upside immediate resistance now stands at the previous support at 0.6976 while key resistance stands at 0.7017 where the 50 day moving average crosses. The pair looks vulnerable below the 0.70 mark and an attempt to yearly low looks possible.