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Australia’s Economy is Improving as Coronavirus Cases are Getting Lower

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Australia’s economic recovery has been released by a new survey by The National Bank of Australia as Coronavirus cases dwindle. 

Business in confidence in Australia reach its highest level since mid-2019, with Victoria’s ability to lessen the numbers of virus cases that is helping the economic state of Australia grow. 

According to NAB monthly business survey, business confidence has risen 5 by five index points in a position of nine. 

On October, business conditions also improved rising one point to an index position of one. 

Behind the improving conditions of Australia, it is mostly driven by the trading conditions and profitability outlook despite employment index weakening at an index position of negative five. 

NAB chief economist Alan Oster said NSW and Victoria made the stronger gains, and the fall in the employment index was likely a sign of further major job cuts. 

“Business conditions saw a marginal improvement in the month,” Mr. Oster said. 

“Trading conditions and profitability continue to improve as the economy opens up. But employment continues to lag and is still negative, suggest at face value there has been ongoing job shedding.” 

South Australia, Queensland and Western Australia all experienced declines in state economic conditions. 

Improvements were greater in retail and services compared to other industries, Mr. Oster said in a note. 

“Retail has been a strong performer despite the deterioration in the labour market, likely reflecting the strong income support from the government,” Mr. Oster said. 

“Service have also recovered and likely seen some pent-up demand more recently. 

The economic rebound would take some time and would remain fragile for now until a vaccine becomes available, noted in a survey.  

Technical Outlook 

 

In the daily charts of AUD/USD, the pair edged higher early Wednesday morning in Sydney session all the way to Tokyo session. 

As what we can see in the chart, the pair respected the support level at 0.72431 which was acting as a support for a weeks since the U.S. Presidential Elections last week. Due to the uncertainty looming in the dollar, investors sought other majors such as GBP, EUR and AUD. AUD broke out from the resistance turned support at 0.72431 last Thursday. 

The price pair may test the resistance level at 0.74023 this week. Once the price breaks from this resistance level, we can expect as strong upside pressure from the Aussies with their positive economic outlook in recovery that is aiding in the surge of the pair. 

If the price resisted at 0.74023, we can expect the price to retest the support level at 0.72431. Once the breaks out from this resistance level, the price may surge lower and retest the next support level at 0.70098. 

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