AUD/USD for Wednesday, February 5, 2014
In the last 24 hours the Australian dollar has surged higher through the resistance level at 0.88 and reached a three week high just shy of 0.8950. For the last couple of weeks the Australian dollar continued to make runs at the resistance level of 0.88 only to be rejected again and again and forced lower. To finish out last week and start this week the Australian dollar seemed content to remain steady and consolidate just below the key 0.88 level, after its strong fall over the last few months. For the best part of the last month the Australian dollar has established and traded within a narrow range roughly between 0.88 and the previous resistance level at 0.90. However for the last couple of weeks the Australian dollar has fallen sharply back down to the support level at 0.88 and pushed through moving to a multi-year low at 0.8660 a couple of weeks ago.
The Australian dollar seems determined to cling on to the 0.88 level and has given itself some reprieve with its surge higher in the last 24 hours. A couple of weeks ago it surged higher to a one week high near 0.8890 before returning back again to the key 0.88 level and below. A few weeks ago the Australian dollar was able to rally higher pushing through the resistance at 0.90 to a one month high near 0.91, however it has since returned to more familiar territory below the resistance levels at 0.90 and 0.88. After showing some resilience in early December moving to a one week high above 0.9150, the AUD/USD spent the next two weeks turning around sharply and falling heavily down to a then three month low close to 0.88.
After all of its steady good work in the middle of November which saw the AUD/USD steadily move higher from support at 0.93 back up to a one week high near 0.9450, the AUD/USD has since returned all of those gains and then some more. Throughout most of October the AUD/USD enjoyed a solid and steady move higher from the support level at 0.93 up to the resistance level at 0.95 and beyond to a high around 0.9760. It has been all down hill since then. Throughout the first half of September the AUD/USD enjoyed a solid run which was punctuated by a strong surge higher sending it to a then three month high just above 0.95. A couple of months ago the AUD/USD had been trying valiantly to stay above the support level at 0.89 as all week it placed downward pressure but was unable to sustain any break lower.
The Reserve Bank of Australia on Tuesday kept interest rates on hold at a record low of 2.5 percent, as expected, at its first policy meeting of the year. The Australian dollar jumped 1 percent to $0.8837, its highest level in nearly two weeks, while shares were little changed. Analysts say despite speculation that the RBA could ease rates following recent dismal employment data, a spike in the inflation rate will keep the central bank in check. Employment figures for December showed the number of people employed decreasing by 22,600, well below consensus expectations for a 7,500 increase. "A pick-up in the inflation rate to 2.7 percent year on year in the fourth quarter showed that the room for more easing is very much limited and we continue to think that the easing cycle already finished in August last year," wrote analysts at Credit Agricole in a report.
AUD/USD Daily chart" title="AUD/USD Daily chart" height="234" width="474"> 
AUD/USD 4 hourly chart " title="AUD/USD 4 hourly chart " height="242" width="474">
AUD/USD February 4 at 22:50 GMT 0.8914 H: 0.8941 L: 0.8861
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.8650 | --- | --- | 0.8900 | 0.9080 | 0.9180 |
During the early hours of the Asian trading session on Wednesday, the AUD/USD is just easing back a little towards 0.89 after reaching a high around 0.8940 several hours ago. The Australian dollar was in a free-fall for a lot of last year falling close to 20 cents. Current range: trading just above 0.8900 around 0.8910.
Further levels in both directions:
• Below: 0.8650.
• Above: 0.8900, 0.9080 and 0.9180.
OANDA’s Open Position Ratios
AUD/USD Position Ratios" title="AUD/USD Position Ratios" height="26" width="474">(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 dropped sharply back below 60% as the Australian dollar has surged higher to a three week high above 0.89. The trader sentiment remains in favour of long positions.
Economic Releases
- 00:01 UK BRC Shop price index (Jan)
- 08:58 EU Composite PMI (Jan)
- 08:58 EU Services PMI (Jan)
- 09:28 UK CIPS/Markit Services PMI (Jan)
- 10:00 EU Retail Trade (Dec)
- 13:15 US ADP Employment Survey (Jan)
- 13:30 CA Building permits (Dec)
- 15:00 US ISM Non-Manufacturing (Jan)