The euro gained ground against the Aussie yesterday following the release of slightly better-than-anticipated Eurozone Sentix investor confidence data for January. Notably, the Australian building approvals data for November was worse than anticipated. This enabled the EUR/AUD pair to strengthen from a low of 1.5391 to a high of 1.5467 in the past 24 hours.
According to the Australian Bureau of Statistics, the country’s building approvals fell by 9% m-o-m in November, following a decline of 5.60% in the prior month and disappointing economists who were expecting a mere 0.10% growth.
The trend estimate for total dwellings approved declined by 2.40% in November, following a 1.90% drop in October. Also, private sector house approvals dropped 2.50% in November to 9,142 units, following a 1.10% drop in the previous month. Private sector dwellings, devoid of houses approved, decreased by 22.70% in November, following an 11.70% decrease in October.
The value of total buildings approved declined by 1.50% in November, following a decrease of 0.40% in October. The value of aggregate residential building decreased 4%, which includes a 3.10% drop in fresh residential building and a 9.20% decline in alterations and additions.
The value of non-residential buildings increased by 2% in November, following a 2.30% rise in October.
According to German Statistical agency Destatis, the country’s industrial production grew by 0.20% m-o-m November, following a 0.40% decline in the earlier month (provision figure is -0.10%) and in line with economists’ estimates.
On a y-o-y basis, German industrial production contracted by 0.40% in November 2022.
Production in industry, devoid of energy and construction, rose by 0.50% m-o-m in November. Also, the production of intermediate goods grew by 1.10%, while the production of capital goods increased by 0.70%.
However, the production of consumer goods fell by 1.50% on a y-o-y basis. Production in industry, barring energy and construction, inched up 0.50% in November.
Furthermore, energy production rose by 3% in November. Likewise, production in construction fell by 2.2% m-o-m in November.
According to the French Ministry for the Economy and Finance, the country’s trade deficit widened to €13.80 billion in November from €11.60 billion in October, which disappointed economists who were expecting the trade deficit to narrow slightly to €11.30 billion.
According to Sentix, Eurozone investor confidence improved to -17.50 in January from -21 in December and surpassed forecasts for a reading of -18.10. A negative reading indicates pessimism, while a positive reading indicates optimism. The reported reading indicates the third successive increase and the highest since June 2022.
The current situation index improved to -19.30 in January from -20 in December. Likewise, the expectations index rose to -15.80 from -22.
In Asia, Sentix investor confidence rebounded to positive territory and reached 1.40 in January, from -4.80 in December. The reading represents the fourth consecutive increase and the highest since March 2022.
The current situation index increased to -4.30 in January from -5.80 in December. Similarly, the expectations index rebounded to 7.30 from -3.80.
However, the Sentix investor confidence index for the US worsened to -3.50 in January, from -0.50 in the previous month. The current situation index also fell to 4.30 from 9.30. Also, the expectations index worsened to -11 from -9.80.
The unexpectedly weak Australian building approvals and the better-than-anticipated Eurozone Sentix investor confidence are expected to keep the EUR/AUD pair range bound with a slight bullish bias in the short term.
The historical price chart indicates that the EUR/AUD pair is rising after testing the support at 1.5415. The next resistance is anticipated only near 1.5740. Additionally, the stochastic indicator is ascending toward the bullish zone. Therefore, we anticipate the EUR/AUD pair to remain in an uptrend for the next few trading sessions.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
