AUD/USD For Thursday, May 29, 2014
Earlier this week the Australian dollar rallied a little higher and moved up to a short term resistance level around 0.9270 before spending the last couple of days easing back a little towards the now well established support level at 0.9220. It was only a couple of weeks ago that the Australian dollar was placing pressure on the resistance level at 0.94 when it was able to poke through for a short period and reach a four week high in the process. However, since that time it has slowly drifted lower and found support again around 0.9220. This level is being revisited after previously providing some support several weeks ago. The Australian dollar did well to finish out a few weeks ago in moving through the resistance level at 0.93 and maintaining the break. Prior to the break through, the Australian dollar had fallen back down below the 0.93 level and settled within a very narrow range just below the level before surging back up.
The last month or so has seen the Australian dollar drift 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 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.
For several months either side of the New Year the Australian dollar 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 quickly 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.
Housing affordability is the best it’s been in over a decade thanks to low interest rates and easing home price rises. Affordability is at its most favorable level since March 2002, according to the Housing Industry Association/Commonwealth Bank Housing Affordability Index released on Wednesday. Affordability in the March quarter was 10.8 per cent more favorable than a year ago, HIA senior economist Shane Garrett said. This was due to low interest rates, earnings growth and a deceleration of home price increases. “Increases in home prices over the past year have been significant,” according to Mr Garrett, “However, the impact of lower interest rates and continued earnings growth has ensured that home purchase affordability has improved over the past year for existing home owners and those on the cusp of entering the market in the short term.” The figures showed affordability had improved in Sydney and Perth but deteriorated in Adelaide, Hobart and Brisbane and remained flat in Melbourne. Affordability was more favourable for existing houses than new ones but Mr Garrett said affordability was expected to continue improving.
AUD/USD May 29 at 02:10 GMT 0.9231 H: 0.9237 L: 0.9221
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.9220 | 0.9100 | — | 0.9380 | 0.9400 | — |
During the early hours of the Asian trading session on Thursday, the AUD/USD is trying to continue to rally higher after enjoying some support at 0.9220. 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 0.90 again. Current range: trading right around 0.9230.
Further levels in both directions:
• Below: 0.9220 and 0.9100.
• Above: 0.9380 and 0.9400.
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 below 60% as the Australian dollar has eased back towards the support level at 0.9220. The trader sentiment remains in favour of long positions.
Economic Releases
- 23:50 (Wed) JP Large Retailers Sales (Apr)
- 23:50 (Wed) JP Retail Sales (Apr)
- 01:30 AU Capital Expenditure (Q1)
- 12:30 CA Current Account (Q1)
- 12:30 US Core PCE Price Index (2nd Est.) (Q1)
- 12:30 US GDP Annualised (2nd Est.) (Q1)
- 12:30 US GDP Price Index (2nd Est.) (Q1)
- 12:30 US Initial Claims (24/05/2014)
- 14:00 US Pending Home Sales (Apr)
Disclaimer: This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.