AUD Surges On Strong Business Confidence Report

 | Apr 12, 2016 04:37AM ET

Market Brief

With the exception of the Japanese yen, the Aussie and the Kiwi, which all moved substantially, FX markets traded sideways during the Asian session in response to an extremely light economic calendar. In Asia, the Australian dollar rose for a third straight day amid a strong improvement in business conditions and confidence (NAB report). According to the National Australian Bank, the business condition gauge jumped to 12 in March from 8 in the previous month, the highest level since October 2014, as all three components (trading, profits and employment) improved during the month. Similarly, business confidence surged to 6 in March from 3 in February, suggesting that the recovery in non-mining sectors is still on track. Overall, the Aussie economy seems to have weathered relatively well the financial market volatility and escalation in global economic concerns. This is due to the rally in most commodity prices and fading expectations for further rate hikes by the Federal Reserve this year. AUD/USD hit 0.7646 in Sydney but was unable to break the 0.7637 resistance (high from April 7th) to the upside. On the downside, the main support can be found at 0.7477 (low from March 24th). On the medium-term, the technical structure favours a bullish bias, however the pair will need a fresh boost to break the strong resistance that lies between 0.7850 and 0.80.