AUD/USD and AUD/JPY Pressured after Poor Housing Data

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AUD/USD and AUD/JPY Pressured after Poor Housing Data

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 1H chart
audusd 1h chart

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.

AUD/USD Daily Chart
audusd daily chart

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.

AUD/JPY 1H Chartaudjpy 06022014

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
audjpy daily chart 6/2

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.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.