AUD/USD breaks below 1-hr 200-MA, ignores strong Aussie housing data

AUD/USD breached the 1-hour 200-MA support of 0.7958 despite a big jump in the Aussie building permits figure [actual 10.9% m/m vs. expected 1.5%]. The currency pair was last seen trading closer to 0.7945 levels. 

Aussie 10-yr yield remains flat lined

The yield on the Aussie 10-yr government bond yield has recovered from the session low of 2.67%, but still trades flat on the day around 2.71%. Meanwhile, its US counterpart is up almost 2 basis points at 2.27%. 

Currently, the yield spread is clearly favoring the American dollar. A 0.5% drop in gold prices is also hurting the Aussie dollar.

AUD/USD Technical Levels

Tuesday’s weak end of the day close confirmed a bearish price RSI divergence on the daily chart. It indicates the rally from 0.7572 [July low] may have topped out. 

FXStreet Chief Analyst Valeria Bednarik writes, “the pair remains within its recent range, presenting a neutral-to-bearish stance short term, as in the 4 hours chart, the price is hovering around a horizontal 20 SMA, whilst technical indicators head modestly lower around their mid-lines. The pair would need to break below 0.7935, the immediate support, to extend its decline during the upcoming hours, yet only below 0.7870 the pair will turn bearish, quite unlikely according to current market conditions.”