AUD/USD steady as construction struggles

The Australian dollar is unchanged in Wednesday trade. AUD/USD is currently trading at 0.7185, down 0.10% on the day.

Construction Work Done dips

Australia’s construction sector continues to limp along, a victim of the severe economic conditions in the wake of the Covid-19 pandemic. One of the most important construction indicators, Construction Work Done, has pointed to contraction in the sector since Q2 of 2018. On Wednesday, the indicator again dipped, with a Q2 reading of -0.7%. This figure was marginally better than the Q1 read of -1.0%, and also stronger than the forecast of -6.5%.

Will Private Capital Expenditure tumble? 

The business sector is also hurting, and analysts are braced for a sharp drop from Private Capital Expenditure, which is projected at -8.2% for the second quarter. The extensive lockdowns in April and May took a sharp toll on business activity, and this will likely translate into a soft reading. If the Q2 decline hits double-digits, the Aussie could lose ground.

.

AUD/USD Technical

AUD/USD has moved upwards in the North American session, after limited movement in the Asian and European sessions

  • AUD/USD is testing resistance at 0.7211. This is followed by resistance at 0.7228.
  • There is support at 0.7164. Below, we have support at 0.7134.
  • AUD/USD is just above the 10-day MA, after breaking above the line on Tuesday

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.