AUD/USD Runs Into Resistance At 0.82

AUD/USD for Tuesday, January 13, 2015

In the last 24 hours the Australian dollar has rallied strongly back up only to run into strong resistance at the 0.82 level, which is presently offering strong supply. This level previously offered reasonable resistance near the end of last year as the Australian dollar made another run only to be thwarted again around 0.82. For most of the last month over the Christmas / New Year period, the Australian dollar traded within a narrow range between support at 0.81 and the resistance level at 0.82. It was only a week ago that the Australian dollar drifted lower to another new multi-year low near 0.8030. The Australian dollar experienced a disappointing November and December moving from resistance around 0.88 down to the new lows recently.

For a couple of months from September through to November, the Australian dollar did well to stop the bleeding and trade within a range between 0.8650 and 0.88 after experiencing a sharp decline throughout September which saw it move from close to 0.94 down to below 0.8650. Back at the beginning of September the Australian dollar showed some positive signs as it surged higher again bouncing off support below 0.93 and reaching a new four week high around 0.94 however that all now seems a distant memory.

The Australian dollar reached a three week high just shy of 0.9480 at the end of July after it enjoyed a solid period which saw it surge higher through the resistance level at 0.9425 to the three week around 0.9480, before easing back towards that level. The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 at the end of June, only to return most of its gains in very quick time to finish out that week. Since the middle of June the Australian dollar has made repeated attempts to break through the resistance level around 0.9425, however despite its best efforts it was rejected every time as the key level continued to stand tall, even though it has allowed the small excursion to above 0.95.

Home loan approvals in Australia unexpectedly fell in November as policymakers try to cool down an investment-led housing boom. Total home loan approvals fell 0.7 per cent in November, versus predictions for a 1.7 per cent gain. The slide follows a downwardly revised 0.2 per cent gain in October, said the Australia Bureau of Statistics. The value of mortgage loans to investors fell by 2.2 per cent, breaking a five-month upward streak. That’s the biggest fall since last January. A 1 per cent gain the prior month was also cut in a half, in revisions. In recent months the Australian Prudential Regulation Authority has been increasing its scrutiny of the lending market, as policymakers become concerned that it had become unbalanced due to speculative demand. In December the APRA tried to persuade banks to cap lending growth to investors at 10 per cent a year.

AUD/USD January 12 at 22:00 GMT 0.8158 H: 0.8255 L: 0.8130

AUD/USD Technical

During the early hours of the Asian trading session on Tuesday, the AUD/USD is trying to steady around 0.8160 after falling sharply from above the resistance level at 0.82. This was after enjoying a solid move back to that level in the last 24 hours. Current range: trading right around 0.8160.

Further levels in both directions:

• Below: 0.8100.

• Above: 0.8200, 0.8650, and 0.8800.

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 60% as the Australian dollar has rallied back towards resistance at 0.82. The trader sentiment remains in favour of long positions.

Economic Releases

• 23:50 (Mon) JP M2 Money Supply (Dec)
• 00:01 UK BRC Retail Sales Monitor (Dec)
• 05:00 JP Economy Watchers Survey (Dec)
• 09:30 UK CPI (Dec)
• 09:30 UK Input & Output Prices (unadj.) (Dec)
• 09:30 UK ONS House Prices (Nov)
• 15:00 US IBD Consumer Optimism (Jan)
• 19:00 US Budget (Dec)

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