AUD/USD for Wednesday, May 20, 2015
In the last 24 hours, the Australian dollar has eased back below the key 0.80 level where it was enjoying some reasonable support. It has stopped just shy of 0.79 and is presently consolidating in a narrow range between 0.7910 and 0.7920. The Australian dollar enjoyed a solid week last week, which culminated in a new three month high above 0.8150 in the middle of last week before easing lower. The last few weeks have seen the Australian dollar on a roller-coaster ride, moving from below 0.78 and up to near 0.82. A couple of weeks ago, 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 few 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.
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 broke 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 retains scope to lower interest rates further, the central bank’s second in command said, while warning against spurring a debt-fueled spending boom. “There is a fairly fine line to tread” in balancing the need to encourage household spending and business investment while preventing imbalances emerging in the economy, Deputy Governor Philip Lowe said in Sydney Monday. Australia has been trying to engineer a transition from mining since late 2011, when investment and commodity prices peaked. Responding to an audience question on the policy outlook after his speech, Lowe said “nothing has changed,” despite the central bank not having provided future guidance when it cut rates to a record-low 2 percent on May 5. “We still have scope to lower interest rates if we need to. That doesn’t mean we’re going to, but we have scope to do that,” Lowe said.
(Daily chart / 4 hourly chart below)
AUD/USD May 20 at 02:20 GMT 0.7914 H: 0.8010 L: 0.7906
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.7850 | 0.7700 | — | 0.8200 | — | — |
During the early hours of the Asian trading session on Wednesday, the AUD/USD is trading in a very narrow range between 0.7910 and 0.7920 after easing lower in the last 24 hours. Current range: trading right around 0.79.
Further levels in both directions:
• Below: 0.7850 and 0.7700.
• Above: 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 towards 60% as the Australian dollar has eased back to 0.79. The trader sentiment is in favor of long positions.
Economic Releases
- 00:30 AU Westpac (ASX:WBC) Consumer Confidence (May)
- 01:00 AU Internet Skilled Vacancies (Apr)
- 05:00 JP Leading indicator (Final) (Mar)
- 08:30 UK BoE MPC minutes released
- 12:30 CA Wholesale Sales (Mar)