By IFCMarkets

Improving data bullish for AU200

Australia’s economic data in the last couple of weeks were positive on balance: consumer confidence improved in February and private sector contraction halted in January. The Westpac Bank Consumer Sentiment Index for Australia rose 2.3% over month to 95.5 in January 2020 from 93.4 in the previous month. And the Commonwealth Bank Composite PMI for Australia was revised upward to 50.2 in January of 2020 from a preliminary estimate of 48.6. Readings below 50 indicate contraction while higher readings point to expansion. December’s reading was 49.6. And while the latest labor market report showed unemployment rate up-ticked to 5.3% from 5.1% in December, it was partly due to increased rate of labor force participation. Improving data are bullish for AU200. However, the Commonwealth Bank Composite PMI for Australia came in today at 48.3 for February, down from a final reading of 50.2 in January, indicating contraction in the private sector. Further deterioration in Australia’s economic performance is a downside risk.

Summary of technical analysis

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