AUD/USD strengthened its position above the critical 1.0230 line and can begin eyeing the next levels, as long as Europe remains calm.
A soar in building approvals was certainly a positive surprise, and also the lack of rate cut by the RBA, which was expected, helped the pair.
1.0230 was a clear separator, after working as support in April and having the same role in June. In between, the pair broke to lower ground, and this break was quite decisive, to say the least.
After flirting with this line on Friday, following the EU Summit (despite the many uncertainties), the pair managed its way up in the new week. Recent data firmed its position.
The amount of building approvals jumped by an amazing 27.3%. While this indicator is quite volatile, the leap is still extraordinary. Expectations stood on a much more modest rise of 5.1%. The housing sector in Australia is one of the weak spots of the mining-oriented economy, and an improvement there is important, especially for the RBA.
And the RBA also did its part: Glenn Stevens and his colleagues left the rate unchanged at 3.50% after two consecutive rate cuts. The first rate cut of 0.50% from 4.25% to 3.75% was a bit of a shocker and hurt the Aussie.
The stability in the rates was accompanied by a statement stating that the situation is balanced: no prospects for another rate cut anytime soon.
The next line of resistance is 1.0340, followed by 1.04. The 1.0230 line turns into support now.
For more on the Aussie, see the AUD USD forecast.
