AUD/USD for Thursday, December 19, 2013
The Australian dollar continues to drift lower and in the last few hours it has gone through a wild swing seeing it move back up to near 0.8950 before collapsing down to a new three month low near 0.8820. After showing some resilience earlier last week moving to a one week high above 0.9150, the AUD/USD finished out last week turning around sharply and falling heavily down to a then three month low close to 0.89. For the last few days the Australian dollar has done very little trading right around 0.8950 before drifting lower to 0.89. After all of its steady good work several weeks ago 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 some. After settling around the 0.95 level for over a week earlier last month, the AUD/USD started to drift lower back towards the support at 0.93. 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.
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. At the beginning of August it moved very well from three year lows to move back above the key level of 90 cents and beyond to a two week high just above 0.92 to finish out that week. At the end of July the AUD/USD fell very strongly and appeared to resume the medium term down trend as it moved to a new three year low near 0.8850 but it reversed very well and looked poised to continue back towards the longer term resistance level at 0.93. For the most part of the last week, it moved very little and was quite subdued staying above the support level at 0.94.
Throughout July the AUD/USD placed constant pressure on the 0.93 level again as it continued to place buying pressure on that level however the resistance there was able to stand firm. It was during this time it did very well to maintain its price level well above 0.92 as place upward buying pressure on the resistance level at 0.93. Throughout July, the AUD/USD spent most of its time trading between 0.90 and 0.93 threatening to break through either level at multiple stages. The 0.9150 level also became a key level during that time providing both some resistance and more recently support, and this was called upon again a few weeks ago providing some much needed support however it was completely ignored a couple of weeks ago as the AUD/USD fell heavily through it. Considering the speed of its decline throughout several months this year, the second half of this year has seen a significant slowing down and almost some consolidation as it has rested well on the support at 0.90 several times. Throughout April to August, the AUD/USD established a strong medium term down trend with lower peaks and lower troughs, as it has moved from near 1.06 down to near 0.90 in that time.
Australia has announced plans to set up a A$100m ($90m; £55m) fund to create jobs in states affected by Holden's decision to stop making cars there. Holden, a subsidiary of General Motors, said last week that it would stop production in Australia by 2017. The move will result in 2,900 people losing their jobs in the states of Victoria and South Australia. There have been fears that Holden's decision may impact growth and result in job losses in related sectors. The federal government will contribute A$60m to the fund, with the Victorian state government putting in A$12m. Prime Minister Tony Abbott said he hoped that Holden would contribute $20m and that he would also be asking for a contribution from South Australia "in the same order as Victoria's". However, South Australia has criticised the package, calling it "manifestly inadequate".
AUD/USD Daily Chart" title="AUD/USD Daily Chart" height="230" width="550">
AUD/USD 4 Hourly Chart" title="AUD/USD 4 Hourly Chart" height="230" width="550">
AUD/USD December 18 at 22:05 GMT 0.8854 H: 0.8944 L: 0.8821
AUD/USD Technical" title="AUD/USD Technical" height="230" width="550">
During the early hours of the Asian trading session on Thursday, the AUD/USD is trying to hang onto the 0.8850 level after falling sharply from near 0.8950 in the last few hours. Despite its strong recovery in September, the Australian dollar has been in a free-fall for a lot of this year. Current range: trading just above 0.8850.
Further levels in both directions:
• Below: 0.8850.
• Above: 0.9500, 0.9550 and 0.9700.
AUD/USD Open Position Ratios" title="AUD/USD Open Position Ratios" height="230" width="550">
(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 70% as the Australian dollar has fallen below 0.89 for the first time in three months. The trader sentiment remains in favour of long positions.
Economic Releases
- 21:45 (Wed) NZ GDP (Q3)
- 04:30 JP All Industry activity index (Oct)
- 05:00 JP Leading indicator (Final) (Oct)
- 09:00 EU Current Account (Oct)
- 09:30 UK Retail Sales (Nov)
- 13:30 US Initial Claims (13/12/2013)
- 15:00 US Existing home sales (Nov)
- 13:30 US Housing Starts (Sep, Oct & Nov)
- 15:00 US Leading Indicator (Nov)
- 15:00 US Philadelphia Fed Survey (Dec)
- EU European Council Meeting (to 20 Dec)