The AUD/USD initially fell to 0.92290 after a report showed that Building approvals in the Australian economy fell as low to -5.6%. Further reports showed that previous months figure was also revised to -4.8% from -3.5% which caused weakness in the early days of the week’s trading session. However the single currency quickly recovered and erased its loss after official data released on Wednesday showed that the Pacific nation’s economy grew at a rate of 1.1% in the first quarter, above expectations for an expansion of 0.9%.
Further more, on Tuesday, the Reserve Bank of Australia left its benchmark interest rate at 2.5% in a widely expected move and said that “on present indications, the most prudent course is likely to be a period of stability in interest rates.” Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the Australian dollar in the week ending June 3. Net longs totaled 21,527 contracts, compared to net longs of 15,848 in the preceding week.
Before the week ended the Australian dollar rose to a more than two-week high against its U.S. counterpart on Friday, after the highly-anticipated U.S. Non-farm payrolls report for May came in broadly in line with market expectations. The Department of Labor said Friday that the U.S. economy added 217,000 jobs last month, just under expectations for jobs growth of 218,000. The unemployment rate remained steady at a five-and-a-half year low of 6.3%.The data disappointed some market expectations for a more robust reading but indicated that the U.S. economy continued to shake off the effects of a weather-related slowdown over the winter, bolstering the outlook for the broader economic recovery.
Weekly bias for the pair remains on the upside as a fresh cross of 21 and 55 EMA was seen in the 4 hours chart with MACD, SSRC and RSI oscillators showing a bullish continuation in the pair. More rise to 0.94075 and 0.94510 resistance zones are expected. A break of 0.94510 would resume the current bullish trend on thr daily charts and further demand to 0.97544 resistance could be seen.
A key economic indicator investors would be watching out for later this week is the Australian Employment and Unemployment statistics which would determine whether further strength and recovery would be seen in the Australian economy.