AUD/USD for Thursday, February 27, 2014
Throughout the last few weeks the Australian dollar has done very little other than continue to trade around the 0.90 level. In the last 24 hours it has fallen down sharply below this level to a support level around 0.8950. Earlier this month the Australian dollar enjoyed a strong move higher moving through the previous resistance level at 0.88 and reaching a three week high around 0.8980. For a 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. During this time the Australian dollar seemed content to remain steady and consolidate just below the key 0.88 level, after its strong fall through most of January. For the last few months the Australian dollar has established and traded within a narrow range roughly between 0.88 and the previous resistance level at 0.90.
Back in January 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 Australian dollar is once again trading below the 0.90 level, and didn't get any help from a weak construction release on Wednesday. Construction Work Done dropped by 1.0%, its fourth decline in five months. The markets had expected a gain of 0.4%. This points to trouble in the important construction industry. We'll get a look at Private Capital Expenditure, a key release, early on Thursday. If the indicator has a weak outing, the wobbly Aussie could head further southwards.
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="231" width="474">
AUD/USD February 26 at 22:35 GMT 0.8960 H: 0.9025 L: 0.8944
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.8950 | --- | --- | 0.9050 | 0.9080 | 0.9180 |
During the early hours of the Asian trading session on Thursday, the AUD/USD is just trying to claw back some ground after falling sharply down below the key 0.90 level. The Australian dollar was in a free-fall for a lot of last year falling close to 20 cents. Current range: trading just below 0.9000 around 0.8960.
Further levels in both directions:
• Below: 0.8950.
• Above: 0.9050, 0.9080 and 0.9180.
OANDA’s Open Position Ratios
AUD/USD Open Position Ratios" title="AUD/USD Open Position Ratios" height="27" 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 moved back above 60% as the Australian dollar has dropped back below 0.90. The trader sentiment remains in favour of long positions.
Economic Releases
- 00:30 AU Capital Expenditure (Q4)
- 09:00 EU M3 Money Supply (Jan)
- 10:00 EU Business Climate Index (Feb)
- 10:00 EU EU Business & Consumer Survey (Feb)
- 13:30 CA Current Account (Q4)
- 13:30 US Durable goods orders (Jan)
- 13:30 US Durables ex defence (Jan)
- 13:30 US Durables ex transport (Jan)
- 13:30 US Initial Claims (22/02/2014)