AUD/USD for Tuesday, October 8, 2013
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 three month high just above 0.95. Since that time it has slowly drifted back a little lower although in the last few of days it has rallied and made its way back up to a short term resistance level at 0.9440 whilst also finding some support at 0.94. It seems content presently to be trading within its range between 0.93 and 0.95. About a month 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.
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. Over the course of the last couple of months the 0.93 level has provided reasonable resistance to any movement higher and now that this level has been broken, it is providing a measure of support. 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 month or so 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 over the last few months, 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 made its way back to 0.93 on a few occasions. The last few months have seen the AUD/USD establish 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.
Australia released two key events last Wednesday, and both were disappointments. Building Approvals, known for its sharp fluctuations, declined by 4.7% in September, compared to a gain of 10.2% the month before. The markets had expected a loss of -0.7%. Meanwhile, the trade deficit widened to -$0.82 billion, its worst showing in seven months. The estimate stood at -$0.45 billion. Earlier in the week, the RBA maintained the key interest rate at 2.50%, where it has been since July. In its Rate Statement, the RBA left the door open for future cuts and reiterated that it would like to see a lower Australian dollar.AUD/USD Hourly Chart" title="AUD/USD Hourly Chart" width="586" height="534" src="https://d1-invdn-com.akamaized.net/content/pic67489075ee1c1a1c0cb0b6522120e8f9.png">
AUD/USD October 7 at 22:20 GMT 0.9426 H: 0.9445 L: 0.9388AUD/USD Technical" title="AUD/USD Technical" width="586" height="534" src="https://d1-invdn-com.akamaized.net/content/pica0517135517a59f5415d44555d6103a2.png">
During the early hours of the Asian trading session on Tuesday, the AUD/USD is easing back towards 0.9420 after surging back towards 0.9450 in the last 12 hours. Despite its slowing and slight recovery the last couple of months, the Australian dollar has been in a free-fall, as the currency lost around 15 cents since the beginning of May. In moving through to 1.0580 only a few months ago, it moved to its highest level since January. Current range: trading above 0.9400 around 0.9430.
Further levels in both directions:
• Below: 0.9400, 0.9300 and 0.8900
• Above: 0.9440 and 0.9500.
(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 towards 70% as the Australian dollar has moved up past 0.94. The trader sentiment remains in favour of long positions.
Economic Releases
- 00:30 AU ANZ Job Ads (Sep)
- 12:15 CA Housing starts (Sep)
- 12:30 CA Merchandise Trade (Aug)
- 12:30 US Trade Balance (Aug) ***
- 14:00 US IBD Consumer Optimism (Oct) ***