AUD/USD for Thursday, October 23, 2014
During the last few weeks the Australian dollar has done well to stop the bleeding and trade within a wide range roughly between 0.8650 and 0.88. Prior to that it had experienced a sharp decline throughout September which saw it move from close to 0.94 down to below 0.8650 and an eight month low in the process. Despite the current resistance at 0.88, it was able to move through to a two week high above 0.8900 a couple of weeks ago before recently falling sharply below 0.87 again. The resistance level at 0.88 remains a factor and is continuing to place downwards pressure on price, however more recently all eyes have turned on to the support level at 0.8650 to see if the Australian dollar can remain above it. Several weeks ago the Australian dollar found some much needed support at 0.8950 and rallied back up to just shy of the key 0.90 level before resuming its decline. The long term key level at 0.90 was called upon to desperately provide some much needed support to the Australian dollar, which it did a little a few weeks ago, however it has more recently provided resistance.
Back at the beginning of September the Australian dollar showed some positive signs as it surged higher again bouncing off support below 0.93 and reaching a new four week high around 0.94 however that all now seems a distant memory. The Australian dollar reached a three week high just shy of 0.9480 at the end of July 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. The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 at the end of June, 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. 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.
The price of Australian consumer goods and services rose 0.5 per cent in the September quarter. The consumer price index (CPI), a key measure of inflation, rose 2.3 per cent in the year to September, the Australian Bureau of Statistics said on Wednesday. The headline CPI was expected to rise by 0.4 per cent in the December quarter for an annual rate of 2.2 per cent, according to an AAP survey of 13 economists. The ABS said seasonally adjusted CPI rose 0.1 per cent in the September quarter, and was up 2.2 per cent in the 12 months to September. The ABS calculates the trimmed mean and weighted median measures on behalf of the Reserve Bank of Australia, which uses them to gauge the underlying trend in inflation. The trimmed mean CPI rose 0.4 per cent in the September quarter, for an annual growth rate of 2.5 per cent. The weighted median CPI rose 0.6 per cent in the September quarter, for an annual rise of 2.6 per cent. The RBA has a target range for annual inflation of two to three per cent, and the latest figures could influence the central bank’s interest rate decisions in the coming year.
AUD/USD October 22 at 22:40 GMT 0.8773 H: 0.8815 L: 0.8743
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.8650 | — | — | 0.8800 | 0.9000 | 0.9100 |
During the early hours of the Asian trading session on Thursday, the AUD/USD is remaining very steady below the resistance at 0.8800 again after finishing last week meeting significant resistance there. 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 near 0.95 again earlier this year. Current range: trading right around 0.8770.
Further levels in both directions:
• Below: 0.8650.
• Above: 0.8800, 0.9000, and 0.9100.
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 eased below 70% as the Australian dollar has been repelled from the resistance at 0.88 again. The trader sentiment remains in favour of long positions.
Economic Releases
- 21:45 (Wed) NZ Trade Balance (Sep)
- 08:00 EU Flash Manufacturing/ Services/Composite PMI (Oct)
- 08:30 UK BBA Mortgage Approvals (Sep)
- 08:30 UK Retail Sales (Sep)
- 12:30 US Initial Claims (18/10/2014)
- 13:00 US FHFA House Price Index (Aug)
- 13:45 US Flash Manufacturing PMI (Oct)
- 14:00 EU Flash Consumer Sentiment (Oct)
- 14:00 US Leading Indicator (Sep)
- EU EU Leaders Hold Summit in Brussels (to 24th)