US DOLLAR GAINS AS HOUSING DATA BEATS ESTIMATES
The Reserve Bank of Australia (RBA) released its minutes for the March meeting. The minutes showed that while the economy was doing well, the officials were cautiously optimistic about the future. Most importantly, they raised concerns about the declining mining and dwelling investments. Also, they had concerns that the GDP growth was not growing as fast as they had expected. They were also concerned that the ongoing debate on trade could lead to a disruption on the country’s growth since most of its income comes from exports.
The Chinese National Bureau of Statistics released the economic data. The data showed that the country’s economy grew by 1.4% in the first quarter. This was lower than the growth in the final quarter of last year and lower than the 1.5% traders were expecting. On an annualized basis, the economy grew by 6.8% which was in line with estimates. The Fixed Asset Investments growth slowed to 7.5% from a high of 7.9%. This was partly attributed to the ongoing uncertainties about trade. Retail sales jumped to 10.2% which was higher than last month’s 9.7%. This was likely because of the week’s long New Year’s celebrations.
In the UK, the Office of National Statistics (ONS) released the employment numbers that showed the unemployment rate of 4.2%, which was better than the expected 4.3%. Claimant count was better than expected at 11.6K while the earnings declined to 2.8%.
In the US, the Census Bureau released the housing statistics. The data showed that 1.36 million building permits were issued in March representing a MoM growth of 2.5%. The housing starts in the month were 1.319M compared to the estimated 1.270M.
The pair started the day soaring to a two-week high of 1.2410. After Germany’s ZEW economic sentiment data and the US building data were released the pair reversed and reached a low of 1.2345, the 23.1% Fibonacci Retracement level. There is a likelihood that the pair could continue moving lower with the next target being 1.2325, which is the 38.2% Fibonacci level.
The cable reached a low of 1.3965 on April, 5. Since then, the pair has had a major rally, reaching a high of 1.4380 today. The pair then started falling after the positive US housing data. Traders should look out for the 1.4280 level which forms an important support for the pair. It is also an important Fibonacci level.
The AUD/USD pair fell after the minutes from RBA showed concerns among officials about the economy. To investors, the statement was an indication that a rate hike was not imminent this year. The AUD was also weighed down by the positive housing data from the United States. As shown below, the pair dropped to the 0.7760 level, which forms an important support. The MACD indicator shows that the pair could drop further, potentially to the 0.7750 level.