AUD/USD for Thursday, May 8, 2014
Over the last couple of weeks or so, the Australian dollar has fallen back down below the 0.93 level and settled within a very narrow range just below the level before surging up through this level in the last 48 hours or so. Since the surge higher it has slowly and steadily eased lower and looks poised to retest the 0.93 level again. It was placing ongoing upwards pressure on the resistance at 0.93 before breaking higher. This level had been providing reasonable resistance over the last week or so denying any movement higher and is likely to play a role again should the AUD/USD retreat lower. The last month or so has seen the Australian dollar drift 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. For the best part of February and March the Australian dollar did very little other than continue to trade around the 0.90 level, although at the beginning of March it crept a little lower down to a three week low below 0.89. Towards the end of March however, the Australian dollar surged higher strongly moving to the resistance level at 0.93 before consolidating for a week or so.
For several months either side of the New Year the Australian dollar established and traded within a narrow range, roughly between 0.88 and the previous resistance level at 0.90. Back in January the Australian dollar was able to rally higher pushing through the resistance at 0.90 to a one month high near 0.91, however it quickly returned to more familiar territory below the resistance levels at 0.90 and 0.88. After showing some resilience in early December moving to a one week high above 0.9150, the AUD/USD spent the next two weeks turning around sharply and falling heavily down to a then three month low close to 0.88.
As the Australian dollar pulled back further from its 2014 high this week amid more sub-par Chinese economic data, analysts say the commodities-linked currency may have topped out. China's factory activity data contracted for the fourth straight month in April, the final Markit/HSBC Purchasing Managers' Index showed on Monday. The data knocked the Aussie down to $0.9250 on Monday, well below its yearly high of near $0.95. "The slowdown in Chinese manufacturing demand appears to be a significant long-term trend, and as such the news is likely to keep a cap on Aussie-greenback which saw some further selling pressure in Asian dealing Monday," said Boris Schlossberg, managing director at BK Asset Management.
AUD/USD May 7 at 23:55 GMT 0.9324 H: 0.9334 L: 0.9318
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.9220 | 0.9100 | --- | 0.9380 | 0.9400 | --- |
During the early hours of the Asian trading session on Thursday, the AUD/USD is just easing back a little as it continues to decline over the last 24 hours from resistance around 0.9380 after recently surging through the resistance level at 0.93. 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 well above 0.90 again. Current range: trading just below 0.9330.
Further levels in both directions:
• Below: 0.9220 and 0.9100.
• Above: 0.9380 and 0.9400.
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 moved back towards 55% as the Australian dollar has eased back slightly from the two week high around 0.9360. The trader sentiment remains in favour of long positions.
Economic Releases
- 01:30 AU Unemployment (Apr)
- 11:00 UK BoE MPC - APF Total (May)
- 11:00 UK BoE MPC - Base Rate (May)
- 11:45 EU ECB Rate Announcement (May)
- 12:15 CA Housing starts (Apr)
- 12:30 CA House Price Index (Mar)
- 12:30 EU ECB President Draghi gives press conference following interest rate announcement
- 12:30 US Initial Claims (03/05/2014)