AUD/USD for Thursday, November 21, 2013
After all of its steady good work over the last week, the AUD/USD has returned most of those gains within the last 24 hours falling back to close to the 0.93 level. The last week saw the AUD/USD steadily move higher from support at 0.93 back up to a one week high near 0.9450. After settling around the 0.95 level for over a week earlier this 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.
It was only a few months ago that many were waiting for the AUD/USD to break below the 90 cents level and then it would have been a matter of how far can it drop. It had continued to drift lower and move towards the 90 cents level, a level not seen for three years. Considering the speed of its decline throughout several months this year, the last couple of months has seen a significant slowing down and almost some consolidation as it has rested well on the support at 0.90 and now made its way back to 0.95. 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. Up until mid April, the Australian dollar was enjoying its best move higher since October and November last year. After making a solid run higher in the middle of June back towards the key level of 0.97, the AUD/USD has since continued its strong and steady decline moving to below 0.90 and levels not seen since near the middle of 2010.
The RBA released the minutes of its most recent policy meeting on Tuesday. The Bank noted that there was "mounting evidence" that interest rate cuts have been effective, and trotted out its customary line that it was holding rates but reserves the right to reduce rates if needed. The RBA again railed against the high value of the Australian dollar, noting that "a lower level of the exchange rate would likely be needed to achieve balanced growth in the economy". Ironically, despite this blunt assessment about the overvalued currency, the Aussie posted respectable gains following the release of the minutes. Analysts have noted that the RBA is maintaining a mild easing bias so as to snuff out any rally by the Australian dollar. 
AUD/USD Daily Chart" title="AUD/USD Daily Chart" height="227" width="550">
AUD/USD 4 Hourly Chart" title="AUD/USD 4 Hourly Chart" height="227" width="550">
AUD/USD November 20 at 22:15 GMT 0.9327 H: 0.9407 L: 0.9316
AUD/USD Technical" title="AUD/USD Technical" height="227" width="550">
During the early hours of the Asian trading session on Thursday, the AUD/USD is continuing to drift lower after its strong fall over the last few hours. Despite its strong recovery the last few months, the Australian dollar has been in a free-fall for a lot of this year. Current range: trading right around 0.9300.
Further levels in both directions:
• Below: 0.9300.
• Above: 0.9500, 0.9550 and 0.9700.
AUD/USD Open Position Ratios" title="AUD/USD Open Position Ratios" height="134" width="659">
(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 remains above 60% as the Australian dollar eases back towards the 0.93 level. The trader sentiment remains in favour of long positions.
Economic Releases
- 08:58 EU Flash Manufacturing PMI (Nov)
- 08:58 EU Flash Composite PMI (Nov)
- 08:58 EU Flash Services PMI (Nov)
- 09:30 UK Public Borrowing (PSNB ex interventions) (Oct)
- 11:00 UK CBI Industrial Trends (Nov)
- 13:30 US Initial Claims (15/11/2013)
- 13:58 US Flash Manufacturing PMI (Nov)
- 13:30 US PPI (Oct)
- 15:00 EU Flash Consumer Sentiment (Nov)
- 15:00 US Philadelphia Fed Survey (Nov)
- EU ECB Governing Council hold non-rate setting meeting
- JP BoJ MPC - Overnight Rate (Nov)