AUD/USD for Monday, May 11, 2015
The last couple of weeks has seen the Australian dollar on a roller-coaster ride moving from below 0.78 and up to near 0.81. Earlier last week the Australian dollar surged higher however it ran into resistance right around 0.7950 and 0.80 before easing slightly and consolidating in a narrow range between 0.7850 and 0.79 to finish out the week. A couple of weeks ago it enjoyed a solid start to the week, moving to a three month high just shy of 0.81. It then eased back towards the key 0.7850 level again where it received some support. A few weeks ago the Australian dollar looked poised to break through the long standing resistance level at 0.7850 even though this level has stood up tall for several months now. During this time the Australian dollar fell sharply but landed on the previous key level at 0.77 which has offered considerable support since that time.
Since the beginning of March the Australian dollar has relied heavily on support at the 0.76 level. Below 0.76 its next obvious support level is down at 0.7550 and it will hoping to be propped up by it. Back in early March the Australian dollar made a statement and broke down strongly through the key 0.77 level which then provided significant resistance for the following few days. It was also able to enjoy some short term support around 0.7550 which propped it up and allowed it to rally strongly back up to above 0.79. Throughout February the Australian dollar made repeated attempts to move up strongly to the resistance level at 0.7850 however it was rejected every time and sent back easing lower, which is why this level remains significant presently. Just prior to that towards the end of February the Australian dollar moved through the resistance at 0.7850 to reach a new four week high around 0.7900. In the second half of January, the Australian dollar fell very sharply and break lower from the trading range that had been established roughly between 0.8050 and 0.8200.
Back in mid-January it made numerous attempts at the resistance level at 0.82 only to be sent back often before finally finishing that week moving through this key level. In doing so it was able to reach a one month high near 0.83 before being sold back down again towards 0.82 as the resistance and selling activity above this level kicked in. Over the Christmas / New Year period, the Australian dollar seemed to have been content with trading in a narrow range below the resistance at 0.82, which continues to remain a key level as it is presently provides resistance. The Australian dollar experienced a disappointing November and December moving from resistance around 0.88 down to the new lows recently. For a couple of months from September through to November, the Australian dollar did well to stop the bleeding and trade within a range between 0.8650 and 0.88 after experiencing a sharp decline throughout September which saw it move from close to 0.94 down to below 0.8650.
Australia’s central bank lowered its growth forecast, predicted higher unemployment and said it was prepared to adjust policy if needed as business spending fails to fire and China struggles with an economic transition. “The board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand,” the Reserve Bank of Australia said Friday in its quarterly monetary policy statement in Sydney. “Growth in the Australian economy is expected to continue at a below-average pace for a little longer than earlier anticipated.” Governor Glenn Stevens and his board cut interest rates to a fresh record of 2 percent on May 5 and said the reduction would “reinforce recent encouraging trends in household demand.” That positive comment and the lack of any indication that it could cut further fostered predictions the easing cycle had ended.
(Daily chart / 4 hourly chart below)
AUD/USD May 11 at 00:15 GMT 0.7917 H: 0.7968 L: 0.7863
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.7850 | 0.7700 | 0.7600 | 0.7950 | 0.8200 | — |
During the early hours of the Asian trading session on Monday, the AUD/USD is consolidating in a narrow range right above 0.79. Current range: trading right above 0.79.
Further levels in both directions:
• Below: 0.7850, 0.7700, and 0.7600.
• Above: 0.7950 and 0.8200.
OANDA’s Open Position Ratios
(Shows the ratio of long vs. short positions held for the AUD/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The long position ratio for the AUD/USD has moved back to near 55% as the Australian dollar has consolidated just above 079. The trader sentiment is in favour of long positions.
Economic Releases
- 01:30 AU NAB Business Conditions & Confidence (Apr)
- 11:00 UK BoE MPC – APF Total (May)
- 11:00 UK BoE MPC – Base Rate
- 11:00 UK BoE Monetary Policy Committee meeting and rate decision