AUD/USD for Wednesday, February 18, 2015
For the last few weeks the Australian dollar has steadied well and traded in a narrow range between support at 0.77 and 0.78, although in the last 24 hours it has rallied to a one week high above 0.7800. To finish out last week it rallied a little higher again back towards 0.78 however it then eased back to receive more support from 0.77. A couple of weeks ago the Australian dollar was on a roller-coaster ride dropping sharply to a new multi-year low below 0.7630 before rallying strongly and moving back up above the 0.77 level and more recently 0.78 before easing back again into its present range. It is presently relying on support from the current key level at 0.77. In the last couple of weeks and prior to all the recent activity, the Australian dollar fell very sharply and break lower from the trading range that had been established roughly between 0.8050 and 0.8200. The 0.77 range is currently offering some support to the Australian dollar which has allowed it to consolidate a little and temporarily stop the recent decline over the last few weeks.
About a month ago it made numerous attempts at the resistance level at 0.82 only to be sent back often before finally finishing that week moving through this key level. In doing so it was able to reach a one month high near 0.83 before being sold back down again towards 0.82 as the resistance and selling activity above this level kicked in. Over the Christmas / New Year period, the Australian dollar seemed to have been content with trading in a narrow range below the resistance at 0.82, which continues to remain a key level as it is presently provides resistance. 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. It seems a long way away now but 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.
The RBA said doubts about a pickup in domestic spending and China’s appetite for raw materials prompted this month’s decision to lower interest rates, and reiterated that the Aussie dollar remains too high. “There was considerable uncertainty around the timing and extent of the expected increase in household consumption growth and non-mining business investment,” it said in minutes of the first meeting of the year, where it debated whether to cut straight away or wait a month. There was also a lack of clarity on “the outlook for the Chinese property market and its implications for Chinese demand for commodities,” it said. The RBA ended a 17-month pause as it lowered the nation’s growth and inflation outlook for this year in response to weak investment intentions outside the mining industry. Policy makers are trying to revive confidence and encourage hiring in an economy where unemployment climbed to a 12 1/2 year high.
(Daily chart / 4 hourly chart below)
AUD/USD February 17 at 21:45 GMT 0.7815 H: 0.7829 L: 0.7742
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.7700 | — | — | 0.8200 | 0.8650 | 0.8800 |
During the early hours of the Asian trading session on Wednesday, the AUD/USD is easing a little from the one week high above 0.7820. Current range: trading right around 0.7820.
Further levels in both directions:
• Below: 0.7700.
• 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 eased back a little towards 50% as the Australian dollar has dropped sharply back under the resistance level at 0.82 and down to a multi-year low near 0.7600 before rallying back above the support at 0.77 in the last week. The trader sentiment remains in favour of long positions.
Economic Releases
- 23:50 (Tue) JP Customs Cleared Trade (Jan)
- 09:30 UK Average Earnings (incl. bonus) (Dec)
- 09:30 UK BoE MPC minutes released
- 09:30 UK Claimant Count (Jan)
- 09:30 UK ILO Unemployment Rate (Dec)
- 13:30 CA Wholesale Sales (Dec)
- 13:30 US Building Permits (Jan)
- 13:30 US Housing Starts (Jan)
- 13:30 US PPI (Jan)
- 14:15 US Capacity utilisation (Jan)
- 14:15 US Industrial production (Jan)
- JP BoJ MPC – Overnight Rate
- JP BoJ Monetary Policy Statement