• Australian dollar slipped on Tuesday after surveys showed a sharp drop in business and consumer confidence.
• Australia’s business and consumer confidence plunged as the Iran war triggered a global oil shock, raising recession risks and complicating the policy outlook as officials weigh further rate hikes to curb inflation.
• A survey by National Australia Bank showed business confidence plunged 29 points to -29 in March, marking the second-largest monthly drop on record, with declines of similar scale last seen during the Global Financial Crisis and the onset of the COVID-19 pandemic.
• A separate survey showed consumer sentiment fell 12.5% to 80.1 in April, the lowest in over two years, while an index of appetite for big-ticket purchases dropped 15% as households tightened spending.
• The surveys heightened concerns that simultaneous supply and demand shocks could push the Australian economy toward stagflation, echoing warnings from a central banker.
• Immediate resistance is located at 0.7141(Higher BB), any close above will push the pair towards 0.7177(23.6%fib).
• Support is seen at 0.7036(38.2%fib) and break below could take the pair towards 0.6977(Lower BB)
Recommendation: Good to sell around 0.7100 with stop loss of 0.7150, and target price of 0.7050
