The Australian dollar has posted gains on Monday, repeating the trend which has marked five of the past six daily sessions. AUD/USD is trading just above the 0.77 line in the European session. In economic news, Australian New Motor Vehicle Sales posted a gain of 2.2%. Later in the day, the RBA releases the minutes of its most recent policy meeting. There are no major US events on the schedule. The NAHB Housing Market Index will be released, with little change expected. As well, New York Fed president William Dudley will deliver remarks at a meeting in New York. On Tuesday, the US releases Building Permits.
Australian releases kicked off the week on a positive note, as New Motor Vehicles Sales jumped 2.2% in March. This was the indicator’s best performance in six months, and raises optimism that the Australian consumer may be opening the purse strings a bit wider. The RBA has indicated that domestic demand has improved, and the markets will get a look at the RBA minutes later on Monday. If the minutes have an optimistic tone, the Aussie could continue to gain ground.
Chinese GDP edged lower in the first quarter, posting a gain of 6.7%. This was down from 6.8% in the previous quarter. A year ago, GDP stood at 7.7%, as the Chinese economy has contracted considerably, causing negative economic repercussions across the world. Although the Chinese economy appears to have stabilized, much of the momentum in economic activity is based on a surge in domestic credit levels, which may not be sustainable. The ease in credit has propelled gains in housing and real estate, sectors which could easily reverse directions. The use of easy credit to help prop up the economy has led to a “debt dependency” which could be a double edged sword, so analysts continue to monitor the Chinese economy, the second largest in the world, with a great deal of apprehension.
The US economy continues to perform well, despite some weak sectors, such as the manufacturing industry. US manufacturers continue to face stiff competition with countries that pay much lower wages, such as China, India, and other Asian countries. With turbulent global economic conditions leading to weaker demand, the manufacturing sector is facing additional challenges. There was some positive news on Friday, as the Empire State Manufacturing Index climbed 9.6 points in April, crushing the estimate of 2.1 points. It was the indicator’s highest level since January 2015. We’ll get a look at the Philly Fed Manufacturing Index, a key manufacturing report, on Thursday. Meanwhile, the UoM Consumer Sentiment dropped to 89.7 points in April, short of the estimate of 91.9 points. Although consumer sentiment remains high, this marked the first time since September that the indicator fell below the symbolic 90 level.
AUD/USD Fundamentals
Sunday (April 17)
- 21:30 Australian New Motor Vehicles Sales. Actual 2.2%
Monday (April 18)
- 8:30 US FOMC Member William Dudley Speaks
- 10:00 US NAHB Housing Market Index. Estimate 59 points
- 10:30 Australian CB Leading Index
- 21:30 RBA Monetary Policy Meeting Minutes
Upcoming Key Events
Tuesday (April 19)
- 8:30 US Building Permits. Estimate 1.20M
*All release times are DST
AUD/USD for Monday, April 18, 2016
AUD/USD April 18 at 7:40 DST
Open: 0.7644 Low: 0.7633 High: 0.7713 Close: 0.7709
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.7472 | 0.7560 | 0.7678 | 0.7796 | 0.7913 | 0.8054 |
- AUD/USD showed limited movement in the Asian session and has posted gains in European trade
- 0.7678 was tested earlier in support and remains a weak line
- There is resistance at 0.7796
- Current range: 0.7678 to 0.7796
Further levels in both directions:
- Below: 0.7678, 0.7560, 0.7472 and 0.7385
- Above: 0.7796, 0.7913 and 0.8054
OANDA’s Open Positions Ratio
The AUD/USD ratio remains unchanged on Monday. Short positions have a majority of positions (40%), indicative of trader bias towards the pair reversing directions and losing ground.