AUD/USD for Thursday, July 31, 2014
The Australian dollar is presently trying to rally and stay above the support level at 0.9300 after its sharp fall in recent hours which saw it move from near 0.9400 down to a seven week low just above 0.9300. It has spent the last few days easing back below both the 0.9425 and 0.9400 levels with the former providing some resistance. The Australian dollar reached a three week high just shy of 0.9480 towards the end of last week 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. It started last week by slowly easing away from the resistance level around 0.9425 which continues to stand tall and play havoc with buyers. The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 a few weeks ago, 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.
Prices in the one of the world's most expensive housing markets are set to pick up pace this year, triggering renewed warnings of a potential bubble brewing. According to a note from HSBC this week, while growth in real estate prices showed some signs of cooling in May, a strong bounce back in house price data and auction clearance rates in June and July could mean prices will end the year 10 percent higher. "While we remain of the view that Australia does not currently have a housing bubble, it seems likely that if the current housing market trends were to persist for too long, there would be a risk of inflating one... the longer mortgage rates remain at low levels, the more this risk grows," said Paul Bloxham, chief economist for Australia and New Zealand at HSBC. Prices in Australia have more than tripled since 1997, on the back of low interest rates, high incomes and growing demand from Asia. HSBC says signs of exuberance are most acute in Sydney, which was branded the second-most unaffordable city to buy a house in the English-speaking world by the Demographia International Housing Affordability Survey published earlier this year. Prices in the city have risen 15 percent in the past 12 months to the end of June, compared to only 7 percent weighted average of other capital cities, HSBC noted. Meanwhile, the investor share of Sydney property has reached record highs.
AUD/USD July 31 at 02:50 GMT 0.9319 H: 0.9332 L: 0.9307
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.9300 | 0.9220 | 0.9100 | 0.9425 | 0.9500 | --- |
During the early hours of the Asian trading session on Thursday, the AUD/USD is trying to rally and stay above the support level at 0.9300 after its sharp fall in recent hours which saw it move from near 0.9400 down to a seven week low. 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 well above 0.95 again. Current range: trading above 0.9300 around 0.9320.
Further levels in both directions:
• Below: 0.9300, 0.9220 and 0.9100.
• 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 moved back up strongly from its lowest level in over one year as the Australian dollar has eased right back towards 0.93. The trader sentiment has changed to being in favour of long positions.
Economic Releases
- 01:30 AU Building approvals (Jun)
- 01:30 AU Export & Import price index (Q2)
- 05:00 JP Housing starts (Jun)
- 06:00 JP Construction orders (Jun)
- 09:00 EU Flash HICP (Jul)
- 09:00 EU Unemployment (Jun)
- 12:30 CA GDP (May)
- 12:30 US Employment cost index (Q2)
- 12:30 US Initial Claims (26/07/2014)
- 13:45 US Chicago PMI (Jul)