AUD/USD for Tuesday, May 12, 2015
To start this new week, the Australian dollar has settled a little and is currently easing back towards the key 0.7850 level. 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, but 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 be 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 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.
Business confidence remained steady in April, while conditions eased slightly, as firms await the federal budget Tuesday night. NAB’s widely watched Monthly Business Survey showed that confidence held at +3 last month, which is a little below average levels. The bank’s economists said that is not a strong enough level to see economic improvement. “Until confidence lifts significantly it is difficult to see a sustained economic recovery developing – to date rate cuts have not appeared to do much and it will be interesting to see what if anything this week’s federal budget will do,” they noted in the report. Conditions eased slightly to +4 from +6 in March, but still remain higher than they were in February and around the survey’s longer term average. Both trading and profitability eased last month, but trading remains at +10, while profitability is at a modest +5. Backing up a downward revision to the Reserve Bank’s employment forecasts made in its Statement on Monetary Policy on Friday, the NAB survey’s measure of employment dipped back into contraction at -2.
(Daily chart / 4 hourly chart below)
AUD/USD May 11 at 23:10 GMT 0.7894 H: 0.7933 L: 0.7876
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 Tuesday, the AUD/USD is consolidating in a narrow range right under 0.79. Current range: trading right below 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 0.7850. The trader sentiment is in favour of long positions.
Economic Releases
- 23:50 (Mon) JP Current Account (Mar)
- 23:50 (Mon) JP Bank Lending Data (Apr)
- 01:30 AU Housing & Lending Finance (Mar)
- 05:00 JP Leading indicator (Prelim.) (Mar)
- 08:30 UK Industrial & Manufacturing Production (Mar)
- 14:00 UK NIESR GDP Est. (Apr)
- 18:00 US Budget (Apr)
- WLD OPEC release monthly oil market report