Daily review AUD/USD (5 June 2013)
June 5, 2013 in Forex Analysis
The Australian dollar fell sharply on Wednesday as disappointing data showed the country’s economy has expanded at a smaller pace than expected. The Aussie extended its losses from Monday and was trading at $0.9563 on the Forex market at the time of writing.
The Australian Bureau of Statistics’ report revealed that the annual growth has increased to 2.5% against forecasts for a 2.7% rise. On quarterly basis, the country’s GDP grew by 0.6% in the Q1 2013, missing experts’ expectations for a climb by 0.8%.
The results sparked speculations for further cuts in the interest rate by the Reserve Bank of Australia. The benchmark rate remained unchanged at 2.75% during the RBA meeting on Tuesday.
Looking at the global scale, Australia’s GDP growth pace could be enviable by other developed economies such as the UK and the US. However, analysts expressed concerns that the country’s main driving force of economic growth –its mining industry, has slowed down due to a decreased demand in key markets such as China. Australia’s ‘’stubbornly’’ high currency adds more fuel to the situation as it has harmed the country’s manufacturing and tourism sectors. The combined effect of these obstacles could hurt the economic growth in the long run.
At yesterday’s trading the Australian dollar depreciated from 0.9760 to 0.9605. This morning the currency pair was trading at 0.9605-0.9650.
If the Aussie successfully overcomes the resistance zone at 0.9650-0.9670, the aim will be reaching and testing the zone at 0.9700-0.9715. If successful, the upward trend will continue to 0.9750-0.9770. If the Aussie drops below the support at 0.9625-0.9605, the next support zone is expected to be at 0.9575-0.9555. In case of a breakdown, the downward trend will continue to 0.9535-0.9515.
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