In the last 48 hours the Australian dollar has surged higher through the resistance level at 0.88 and reached a three week high just shy of 0.8950. In the time since it has done to settle and maintain the break above 0.89. For the last couple of weeks the Australian dollar continued to make runs at the resistance level of 0.88 only to be rejected again and again and forced lower. To finish out last week and start this week the Australian dollar seemed content to remain steady and consolidate just below the key 0.88 level, after its strong fall over the last few months. For the best part of the last month the Australian dollar has established and traded within a narrow range roughly between 0.88 and the previous resistance level at 0.90. However for the last couple of weeks the Australian dollar has fallen sharply back down to the support level at 0.88 and pushed through moving to a multi-year low at 0.8660 a couple of weeks ago.
The Australian dollar seems determined to cling on to the 0.88 level and has given itself some reprieve with its surge higher in the last 24 hours. A couple of weeks ago it surged higher to a one week high near 0.8890 before returning back again to the key 0.88 level and below. A few weeks ago 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 has since 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.
After all of its steady good work in the middle of November which saw the AUD/USD steadily move higher from support at 0.93 back up to a one week high near 0.9450, the AUD/USD has since returned all of those gains and then some more. 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. It has been all down hill since then. 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.
On Tuesday, the Reserve Bank of Australia maintained the benchmark interest rate at 2.50%, where it has been pegged since August. This didn't grab much attention from the markets, but the Rate Statement did and the Aussie shot higher in response. Governor Glenn Stevens noted that interest rates are at an appropriate level, indicating a shift in stance from easing to neutral. He also made a point of noting the Australian dollar's recent slide, stating that the lower value of the currency will "assist in achieving balanced growth" for the Australian economy. Importantly, Stevens refrained from saying that the Australian dollar was "uncomfortably high" as he has done in the past. The RBA has room to be pleased, as the Aussie has shed 8% of its value in the past three months. However, if the Aussie rebounds and rises into the low-90s, we could see the RBA again attempt to "talk down" the currency.
AUD/USD Daily chart " title="AUD/USD Daily chart " width="474" height="233"> 
AUD/USD 4 Hourly Chart" title="AUD/USD 4 Hourly Chart" width="474" height="239">
AUD/USD February 5 at 21:55 GMT 0.8912 H: 0.8938 L: 0.8881
AUD/USD Technical:
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.8650 | --- | --- | 0.8900 | 0.9080 | 0.9180 |
During the early hours of the Asian trading session on Thursday, the AUD/USD is remaining quite steady right above 0.89 after staying there for the last couple of days. The Australian dollar was in a free-fall for a lot of last year falling close to 20 cents. Current range: trading just above 0.8900 around 0.8910.
Further levels in both directions:
• Below: 0.8650.
• Above: 0.8900, 0.9080 and 0.9180.
OANDA’s Open Position Ratios
AUD/USD Position Ratios" title="AUD/USD Position Ratios" width="474" height="27">(Shows the ratio of long vs. short positions held for the 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 dropped sharply back to 60% as the Australian dollar has surged higher to a three week high above 0.89. The trader sentiment remains in favour of long positions.
Economic Releases
- 00:30 AU Retail Sales (Q4)
- 00:30 AU Retail trade (Dec)
- 00:30 AU Trade Balance (Dec)
- 12:00 UK BoE MPC - APF Total (Feb)
- 12:00 UK BoE MPC - Base Rate (Feb)
- 12:45 EU ECB - Interest Rate (Feb)
- 13:30 CA Merchandise Trade (Dec)
- 13:30 EU ECB President Draghi gives press conference following interest rate announcement
- 13:30 US Initial Claims (01/02/2014)
- 13:30 US Non Farm Productivity (Prelim.) (Q4)
- 13:30 US Trade Balance (Dec)
- 13:30 US Unit Labour Costs (Prelim.) (Q4)
- 15:00 CA Ivey PMI (Jan)