Global macro overview for 30/08/2017:
The Building Approvals in Australia decreased less than expected last month. According to the Australian Bureau of Statistics, Building Approvals declined at a seasonally adjusted -1.7%, while the market participants expected a deeper decline of -5.4% after an 11.7% increase in June. On an annual basis, building approvals were down 13.9%, official data showed.
Strong growth in new approvals and permits indicates a growing housing market. Because real estate generally leads economic developments - housing tends to thrive at the start of booms and wane at the onset of a recession. Moreover, building permits are monitored closely by investors, because they are considered a forerunner of future residential construction plans.
The Reserve Bank of Australia released recently the policy meeting minutes, warning about the overheating house market in Australia. Housing market conditions "warrant careful monitoring" were the exact words used by the policymakers in the statement. Despite the fact that the house prices are slowly stabilizing in Australia's biggest cities like Sydney, Melbourne, and Canberra, the prices are still rising apparently. In this situation, the overpriced values of houses have made it virtually impossible for younger buyers to enter the market. The situation on the overheated house market in Australia might not stabilize anytime soon and more approvals are being granted. It will be very interesting for the global investors to watch the next RBA meeting and their conclusions regarding the house market situation.
Let's now take a look at the AUD/USD technical picture at the H4 time frame. The bulls have managed to break out above the 61% Fibo at the level of 0.7966, but the price is still trading inside of the golden channel and there is a visible bearish divergence between the price and the momentum indicator. The next technical support is seen at the level of 0.7905, but only a clear violation of the level of 0.7865 would put the bears back in control over this market.
