Despite the growth sown by the Australian index of leading indicators, the July figures are below the trend. The index gained only 1 point during the reported period, thereby reaching 284pts. The annual growth is around 2.2%. However, in order to catch up with the trend, the index should have strengthened by 2.7%.
It should be noted that 3 out of 4 components strengthened. In particular, stock market gained 4.2%, real money supply was up by 0.4%, industrial production increased by 0.6%. At the same time, construction orders declined by 17.2%.
According to Bill Evans, an economist working for Westpac, the strengthening of the index suggests a positive tendency. However, the growth was too weak to be confident in stable economic growth.
Forex.
According to , the Australian Dollar is retracing against the recent rally versus the US Dollar. The experts report that AUDUSD has already finished forming a downswing represented by wave b(C) of level H4.
A further downswing (on breaking below 1.0409) may find the bottom around 1.0394, 1.0360, 1.0329. Alternatively, a break above 1.0623 will resume the recent rally. If this is the case, the price may encounter resistance around 1.0705.
