AUD/USD sees little action despite business confidence hitting lowest since January 2016

• AUD/USD keeps moderate gains above 0.71 following the release of mixed NAB survey results.
• Business confidence index fell to its lowest level in over two years in March.
• Business conditions index bettered estimates, saving the day for the Aussie bulls. The focus now is on China Caixin PMI release.

A widely-followed gauge of business confidence fell to the lowest level since January 2016 but so far has failed to move the needle on the Aussie dollar.

National Australia Bank's business confidence index fell 2pts to 0 index points in March, continuing it's below average run, missing the expected rise to 4 from the February reading of 2.

The business conditions index, however, rose by 3pts to +7 index points in March, beating the expected slide to 2 by a big margin. The uptick was driven by increases in each of the index components - Profitability (now +5) and trading (+12) are now just above average, while the employment index (+7) is well above average.

The above-forecast business conditions index may have saved the day for the Aussie bulls. AUD/USD is currently trading at 0.7112, having gapped higher at 0.7122 earlier today and has barely moved post-NAB data release.

Looking forward, the currency pair may rise well above 0.7122 if China Caixin PMI manufacturing, which surveys the small and medium-sized export-oriented units, blows past expectations. The data is scheduled for release at 01:45 GMT.

Technical Levels