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.

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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

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.