AUD/USD has posted gains on Tuesday, continuing the trend we saw in the Monday session. AUD/USD is trading at the 0.78 line early in the North American session. In economic news, the RBA minutes reiterated that it was in no rush to lower interest rates. RBA Governor Glenn Stevens spoke at a banking conference in New York. In the US, Building Permits and Housing Starts both posted sharp drops and missed expectations. On Wednesday, the US releases Existing Home Sales and Australia will publish NAB Quarterly Business Confidence.
The Australian dollar continues to move higher, and has gained 150 points so far this week. The Aussie lost ground after oil producers failed to reach agreement at a weekend meeting in Qatar, raising fears that oil prices would collapse. However, this dire prediction failed to materialize as oil prices have stabilized this week. With investors less averse to risk, commodity currencies like the Australian dollar have moved higher. Meanwhile, the RBA released the minutes of its April policy meeting. The central bank said that it would cut rates if warranted by economic conditions. Policymakers also expressed concern about the appreciation of the Australian dollar, which has climbed 2 percent since March 1. However, when the RBA has felt that the Aussie is overvalued, it has historically tried to “talk down” the currency rather than lower interest rates.
The US economy continues to perform well despite some weak sectors, such as the manufacturing industry. US manufacturers continue to face stiff competition with countries that pay much lower wages, such as China, India, and other Asian countries. With turbulent global economic conditions leading to weaker demand, the manufacturing sector is facing additional challenges. There was some positive news on Friday, as the Empire State Manufacturing Index climbed 9.6 points in April, crushing the estimate of 2.1 points. It was the indicator’s highest level since January 2015. We’ll get a look at the Philly Fed Manufacturing Index, a key manufacturing report, on Thursday. Meanwhile, the UoM Consumer Sentiment dropped to 89.7 points in April, short of the estimate of 91.9 points. Although consumer sentiment remains high, this marked the first time since September that the indicator fell below the symbolic 90 level.
AUD/USD Fundamentals
Monday (April 18)
- 21:30 RBA Monetary Policy Meeting Minutes
Tuesday (April 19)
- 8:30 US Building Permits. Estimate 1.20M. Actual 1.09M
- 8:30 US Housing Starts. Estimate 1.17M. Actual 1.09M
- 9:30 RBA Governor Glenn Stevens Speaks
- 20:30 US MI Leading Index
Upcoming Key Events
Wednesday (April 20)
- 14:00 US Existing Home Sales. Estimate 5.29M
- 21:30 Australian NAB Quarterly Business Confidence
*All release times are EDT
AUD/USD for Tuesday, April 19, 2016
AUD/USD April 19 at 8:45 EDT
Open: 0.7768 Low: 0.7759 High: 0.7806 Close: 0.7802
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.7560 | 0.7678 | 0.7796 | 0.7913 | 0.8054 | 0.8163 |
- AUD/USD has shown small gains over the Asian and European sessions
- There is resistance at 0.7913
- 0.7796 remains fluid and has switched to a support role. It is under strong pressure
- Current range: 0.7796 to 0.7913
Further levels in both directions:
- Below: 0.7796, 0.7678, 0.7560 and 0.7472
- Above: 0.7913, 0.8054 and 0.8163
OANDA’s Open Positions Ratio
The AUD/USD ratio has shown movement towards short positions on Tuesday. Short positions have a majority of positions (44%), indicative of trader bias towards the pair reversing directions and losing ground.