AUD/USD for Wednesday, September 17, 2014
The Australian dollar has seen its sharpest fall in over 12 months as it fell strongly every day last week from near 0.94 down to a six month low at 0.90 to start this week. It has received solid support from the 0.90 level which has assisted it to move higher however it has run into firm resistance at the 0.91 level too. The long term key level at 0.90 has been called upon to desperately provide some much needed support to the Australian dollar, which it has done in the last few days. It showed some positive signs to finish out a couple of weeks ago as it surged higher again bouncing off support below 0.93 and reaching a new four week high around 0.94 before falling sharply again. A few weeks ago it enjoyed a solid week moving up from below 0.9300 to a then three week high around 0.9370 before easing a little lower to finish the week. The Australian dollar reached a three week high just shy of 0.9480 at the end of July after it enjoyed a solid period which saw it surge higher through the resistance level at 0.9425 to the three week around 0.9480, before easing back towards that level.
The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 at the end of June, only to return most of its gains in very quick time to finish out that week. Since the middle of June the Australian dollar has made repeated attempts to break through the resistance level around 0.9425, however despite its best efforts it was rejected every time as the key level continued to stand tall, even though it has allowed the small excursion to above 0.95. After the Australian dollar had enjoyed a solid surge in the first couple of weeks of June which returned it to the resistance level around 0.9425, it then fell sharply away from this level back to a one week low around 0.9330 before rallying higher yet again. Its recent surge higher to the resistance level around 0.9425 was after spending a couple of weeks at the end of May trading near and finding support at 0.9220. The 0.9220 level has repeatedly reinforced its significance as it is again likely to support price should the Australia dollar retreat further.
Throughout April and into May the Australian dollar drifted lower from resistance just below 0.95 after reaching a six month high in that area and down to the recent key level at 0.93 before falling lower. During this similar period the 0.93 level has become very significant as it has provided stiff resistance for some time. The Australian dollar appeared to be well settled around 0.93 which has illustrated the strong resurgence it has experienced throughout this year. For the best part of February and March the Australian dollar did very little other than continue to trade around the 0.90 level, although at the beginning of March it crept a little lower down to a three week low below 0.89. Towards the end of March however, the Australian dollar surged higher strongly moving to the resistance level at 0.93 before consolidating for a week or so.
The RBA has warned of speculative demand in the country's real estate sector, triggered by record low interest rates, signaling that further monetary policy easing is unlikely in the near term. The RBA issued the statement Tuesday in the minutes from its latest policy meeting on September 2, when it kept interest rates at 2.5 percent for a 13th straight month. "For investors in housing, the pick-up in housing credit growth had been more pronounced than for owner-occupiers, with investor demand particularly strong in Sydney and to a less extent in Melbourne," RBA said. "Members further observed that additional speculative demand could amplify the property price cycle and increase the potential for property prices to fall later," it added. Australia's home prices have risen more than 10 percent so far this year, driven especially by demand for investment properties. On the Australia dollar, the RBA maintained that the currency remains "above its fundamental value," despite the Aussie's recent dramatic fall against the US dollar, dipping below the 90-cent handle this week for the first time since March.
AUD/USD September 17 at 02:40 GMT 0.9062 H: 0.9096 L: 0.9061
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.9000 | --- | --- | 0.9425 | 0.9500 | --- |
During the early hours of the Asian trading session on Wednesday, the AUD/USD is easing back slightly after running into resistance at 0.91. The Australian dollar was in a free-fall for a lot of last year falling close to 20 cents and it has done very well to recover slightly to near 0.95 again. Current range: trading right below 0.9100.
Further levels in both directions:
• Below: 0.9000.
• Above: 0.9425 and 0.9500.
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 settled above 60% as the Australian dollar has dropped sharply back through the 0.93 level back down towards 0.9000. The trader sentiment remains in favour of long positions.
Economic Releases
- 00:30 AU Westpac-MI Leading Index (Aug)
- 08:30 UK Average Earnings (Jul)
- 08:30 UK Claimant Count Change (Aug)
- 08:30 UK Claimant Count Rate (Aug)
- 08:30 UK ILO Unemployment Rate (Jul)
- 09:00 EU HICP - Core (Aug)
- 09:00 EU HICP (Aug)
- 12:30 US CPI (Aug)
- 12:30 US Current Account (Q2)
- 14:00 US NAHB Builders survey (Sep)
- EU ECB Governing Council hold non-rate setting meeting
- UK BoE MPC minutes released