Australia’s housing boom has come to an end. Building permits for April came in at -5.6%, marking 3 straight months of declining permits and disappointing economists forecasts of a 2.1% increase.
AUD/USD fell after this release, dipping from 0.93 to about an overnight low of about 0.9245 The pair is challenging last week’s bottom attempt, and it look like the pressure is still on key support around 0.92.
For AUD/USD a break below 0.92 reverses the mode from bullish to neutral to bearish in the daily chart. In this scenario, we should still expect some support just above 0.91, a previous resistance area. Then if the 0.92 level becomes resistance, we might see further downside risk, with the consolidation support in February/March around 0.89.
AUD/JPY started the week with a bullish break from last week’s consolidation high of 94.80. However ,after failing to cross 94.90, it retreated. It fell further after the poor buildings permit data and formed topping action. However, the prevailing bullish momentum is still in play, and a return above 94.60 could reflect bullish continuation in the near-term.
If price can stay south of 94.60, and push below 94.20, we are more likely in a bearish swing, with the 93.70 and 93.15 support pivots in sight. We might also see some support at the 94.00 level especially if it coincides with a rising trendline from a couple of week’s ago.
AUDJPY Daily Chart
The daily chart shows the market working off a top that formed after the 96.50 high on the year. Price has fallen below a rising trendline but sits just above the 200 and 100-day SMAs. A break below 93.00 should give a clear picture of the bearish outlook, which has the 91-91.30 common lows, then the 90 area in sight. There is also a rising trendline that might coincide with the 90.00 level if price does fall to it.
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